Oil boosts Wall Street stocks

By Margreet Dietz

Traders work on the floor of the New York Stock Exchange. Photo / AP
Traders work on the floor of the New York Stock Exchange. Photo / AP

Equities on both sides of the Atlantic rose with the price of oil after Russia signalled it will join an agreement to curb oil output.

Many oil producers outside OPEC have expressed a willingness to cooperate on output caps, said Saudi Arabia's Energy and Industry Minister Khalid Al-Falih at an energy congress in Istanbul, according to Bloomberg. He added that he was "optimistic" there'll be a deal that could lift prices as high as US$60 by year-end.

"Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join," Russian President Vladimir Putin said in Istanbul, according to Reuters.

Oil prices rallied, with Brent touching US$53.73 a barrel, the highest level in a year, in London.

"Putin coming out to say Russia will be part of the initiative has added another layer of credence to the speculation there will be a coordinated cut," John Kilduff, partner at New York energy hedge fund Again Capital, told Reuters.

"At some point, the market will call them on it and say 'show us the cuts'," Kilduff noted.

"And at that point, the Saudis might be willing to underwrite the cuts on their own because they really want these high prices. To me, US$55 Brent is without doubt the next target," he said.

Wall Street and energy stocks followed suit. In 2.07pm trading in New York, the Dow Jones Industrial Average gained 0.6 per cent, while the Nasdaq Composite Index climbed 0.8 per cent. In 1.52pm trading, the Standard & Poor's 500 Index rose 0.5 per cent.

The Dow advanced as gains in shares of Apple as well as those of Exxon Mobil and Chevron, recently up 2.1 per cent, 2.1 per cent and 1.9 per cent respectively, outweighed slides in shares of Wal-Mart and those of Procter & Gamble, recently down 1.2 per cent and1 per cent respectively.

In Europe, the Stoxx 600 Index finished the day with a gain of 0.7 per cent, bolstered by advances in energy stocks. The UK's FTSE 100 Index increased 0.8 per cent, France's CAC 40 Index rose 1.1 per cent, while Germany's DAX Index added 1.3 per cent.

"Russia's comments on supporting an OPEC deal are creating positive sentiment," Samy Chaar, chief economist at Lombard Odier in Geneva, told Bloomberg.

A perception that Democratic US Presidential candidate Hilary Clinton won the second debate with Republican candidate Donald Trump, securing her chances to win, helped underpin the mood on financial markets.

Investors are gearing up for a fresh round of US quarterly earnings, with Alcoa set to report on Tuesday.

Meanwhile, shares of Twitter sank further, down 13.3 per cent as of 2.24pm in New York, amid reports that it has failed to attract any potential bidders.

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