Tuesday's early afternoon trade: stocks jump as oil surges on report of output freeze

A surge in crude oil drove strong gains on Wall Street on Tuesday after a report that Russia and Saudi Arabia had agreed to freeze output ahead of a producers meeting on Sunday. Oil prices rose more than 3 percent to their highest in five months after Russia's Interfax news agency also reported that the final decision to freeze production will not depend on Iran.
The S&P energy sector rose 2.43 percent, leading all 10 major sectors higher. Chevron was up 2.3 percent and gave the biggest boost to the Dow. "We have oil co-operating with the bulls today," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. Bakhos added the US earnings season would set the tone for the stock market going forward for the next quarter of trading. However, Alcoa's lacklustre first-quarter report marked a dull start to the season. The company's shares were down 4.7 percent at $9.28.
Investors will focus on corporate earnings over the next several weeks, amid turbulent global markets and uncertainty surrounding the US Federal Reserve's plan to raise interest rates. S&P 500 companies are expected to post a decline of 7.8 percent in profit on average for the latest quarter, according to Thomson Reuters I/B/E/S. The S&P 500 index has risen more than 12 percent from its low in February as oil rebounded and data suggested that the US economy was recovering. At 12:13 pm ET the Dow Jones industrial average was up 126.53 points, or 0.72 percent, at 17,682.94, the S&P 500 was up 12.97 points, or 0.64 percent, at 2,054.96 and the Nasdaq Composite was up 17.65 points, or 0.37 percent, at 4,851.05.