Wall Street shares closed comfortably higher on Wednesday, as a shock fall in US inventories fuelled a jump by oil futures and energy stocks, and harsh Fed rate minutes were sidelined.
The broad-based S&P500 extended gains on the day and closed up 1.05% at 2,066 while the S&P Midcap 400 reversed direction and ended up 0.97% at 1,436. Others to reverse direction were the S&P Smallcap 600, up 0.85% at 678 and the wider small-cap Russell 2000 up 1.18% at 1,108.
After successive weekly record highs, it came as a tonic to markets when a surprise drop in inventories sent oil prices rising by over 5%. The Energy Information Administration reported U.S. crude supplies in storage fell by 4.9mln barrels in the week ended April 1.
The US oil benchmark West Texas Intermediate future was up 5.38% at $37.82.
So when minutes from the last Fed rate-setting meeting in mid-March were published late in the session and showed a divided central bank with plenty of voting bankers calling for a rate hike as soon as April, it was left in the shade by the advancing oil price.
Midsession
US small-cap stocks swung higher at midsession on Wednesday after a surprise drop in US weekly oil inventories boosted energy futures and calmed jitters ahead of the minutes of the Federal Reserve's recent rate-setting meeting.
A rebound in the price of oil helped offset the derailment of the Pfizer-Allergan and Halliburton-Baker Hughes mergers and the political uncertainty in the presidential race as stocks traded flat ahead of Fed minutes.
The broad-based S&P500 extended gains on the day and was last seen up 0.73% at 2,060 while the S&P Midcap 400 reversed direction and was up 0.57% at 1,431. Others to reverse direction were the S&P Smallcap 600, up 0.48% at 675 and the small-cap Russell 2000 up 0.67% at 1,103.
After successive weekly record highs, it came as a tonic to markets when a surprise drop in inventories sent oil prices rising by over 5%. The Energy Information Administration reported U.S. crude supplies in storage fell by 4.9mln barrels in the week ended April 1.
The US oil benchmark West ETxas Intermediate future was up 5.07% at $37.71.
But it was perhaps ironic that the biggest beneficiary of rising markets in the S&P400 was not an oil company, but the beleagured renewable energy company SunEdison (NYSE:SUNE) which rose by 27% to $0.33. Meanwhile, the top riser in the S&P600 was Stone Energy (NYSE:SGY) which was buoyed to the tune of 13.1% to $0.69.
It was Ultra Petroleum (NYSE:UPL) which completed the trio of smaller ticker tops, as the fastest riser in the Russell 2000, up 53.3% to $0.46.
The oil-led gains offered some respite for investors waiting for the Federal Reserve minutes. Last month, the Fed left rates unchanged but since then there have been various schools of thought aobut the timing and pace of any rate hikes ahead.
"The FOMC minutes are often stale given the two-week lag but speculation of a rift between policymakers has increased the importance of the release in April," said Jasper Lawler, markets analyst at CMC Markets.
The Fed minutes are due to be published at 1400 EDT (1800 GMT) on Wednesday.
Open
Expectations of a strong start proved misplaced, as investors chose to sit on their hands ahead of today's release of the FOMC's meeting notes.
The S&P 00 edged up a point (0.1%) to 2,046, but the mid-cap S&P 400 and the small-cap Russell 2,000 both dipped a point, or 0.1%, with the former ebbing to 1,422 and the latter to 1,095.
The collapse of the proposed takeover of Allergan PLC (NYSE:AGN) by Pfizer Inc (NYSE:PFE) does not seem to have done the share price of either pharmaceutical company any harm.
Allergan's ADRs were up 3.1% at $243.91 after an hour or so of trading while Pfizer's shares were 2.5% better at $32.15.
Sector peer Tokai Pharmaceuticals Inc (NASDAQ:TAKI) was also wanted, advancing 16.4% to $6.81, as it said it would present at the annual Needham Healthcare Conference on 13 April.
BIND Therapeutics Inc (NASDAQ:BIND) took a tumble, however, losing 68 cents at $1.72, after it announced plans to slash its workforce.
In addition to the workforce reduction initiatives, the company is mulling raising additional capital, a strategic collaboration with one or more parties, or the licensing, sale or divestiture of some of the company’s proprietary technologies.