Wall Street gained on Tuesday, led by surging energy shares that were buttressed by rising oil prices, as investors scooped up equities at the start of corporate earnings season. All 10 S&P sectors closed higher and the Dow industrials posted their best day in about a month. Energy shares jumped 2.8 percent, with oil majors Exxon Mobil and Chevron giving two of the biggest boosts to the S&P 500.
Financials, the worst performing group this year, rose 1.3 percent. J.P. Morgan was set to report results on Wednesday, followed by other banks later in the week. S&P 500 profits are expected to have fallen 7.8 percent in the first quarter, according to Thomson Reuters I/B/E/S, but that low bar may make it easier for companies to post positive surprises.
"Because of lowered expectations, markets have a way of popping a little bit before the earnings set in," said Peter Kenny, senior market strategist at Global Markets Advisory Group in Berkeley Heights, New Jersey. "It's the lowered expectations that are really setting the framework for any sort of short-term rally." The Dow Jones industrial average rose 164.84 points, or 0.94 percent, to 17,721.25, the S&P 500 gained 19.73 points, or 0.97 percent, to 2,061.72 and the Nasdaq Composite added 38.69 points, or 0.8 percent, to 4,872.09.
Wall Street's rocky start to 2016 was followed by a sharp rebound since mid-February and stocks are now slightly positive for 2016. The stock market has taken its cues from the fluctuations in depressed oil prices for much of the past few months, although that correlation has weakened some in recent weeks. Global oil prices hit four-month highs on Tuesday, hovering just under $45 a barrel after a report that top producers Russia and Saudi Arabia have agreed to freeze output ahead of a much-anticipated producers meeting on Sunday.
Alcoa shares fell 2.7 percent to $9.48. The metals company late on Monday reported a lower quarterly profit, with results hurt by low commodity prices. Juniper Networks sank 7.4 percent to $23.06. The network gear maker projected lower-than-expected quarterly profit and revenue. About 7.5 billion shares changed hands on US exchanges, above the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data. Advancing issues outnumbered declining ones on the NYSE by 2,405 to 599, for a 4.02-to-1 ratio on the upside; on the Nasdaq, 1,902 issues rose and 925 fell for a 2.06-to-1 ratio favouring advancers. The S&P 500 posted 11 new 52-week highs and 4 new lows; the Nasdaq recorded 29 new highs and 26 new lows.