US top line stocks gave up all their intraday gains on growing fears oil supply will not be curbed this month, while mid- and small-cap stocks advanced on Monday.
The S&P 500 market bellwether ended unchanged at 2,139, but the S&P Midcap 400 advanced by 0.8% to 1532 and the S&P Smallcap 600 added 0.6% to 744.
The wider small-cap Russel 2000 moved 0.6% higher to 1232.
The US oil benchmark WTI, which at one point this session peaked at $44.15, ended up 0.6% at $43.30.
Earlier in the session markets turned buoyant on hopes stirred by the Venezuelan President that OPEC and non-OPEC nations were getting close to a deal to curb oil supply, which some traders interpreted as reading a deal in Algiers on Sept 26.
But those hopes faded as the session wore on and factors that had been retired, such as fears over whether the US Federal Reserve will hike rates on Wednesday, came to the fore again.
Midsession
Wall Street stocks dipped at midsession on Monday after oil price gains receded.
An earlier oil rally after Venezuela’s President hinted at a nearing deal among OPEC members and non-OPEC members to stem oil supplies receded as hopes ebbed of a potential oil production freeze being announced by major producers at International Energy Forum in Algiers on 26 September.
The S&P 500 index, the market bellwether, was down 0.1% at 2,136 while the S&P Midcap 400 – the biggest gainer this session – clung to reduced gains of 0.4% to 1527, while the S&P Smallcap 600 was up 0.3% to 742.
Market expectations over the timing of the Fed’s next rate hike have been in flux in recent weeks amid mixed comments and signals from officials at the central bank. Concerns over further monetary tightening was initially tempered last week after Lael Brainard, a Fed governor, urged “prudence” over further tightening and a run of disappointing economic data – including weak retail sales.
However data on Friday showing core US inflation rising at the fastest pace in six months once again swung needle back towards a possible rate rise this year and triggered a sell-off in stocks and Treasuries.
Open
US stocks bounced back on Monday as a surge in oil prices after comments by the Venezuelan President and a report showing an improvement in home-builder confidence gave stocks a boost.
Venezuela’s President Nicolas Maduro said on Sunday members of the Organization of Petroleum Exporting Countries and non-OPEC nations were nearing an agreement that would stabilise glut-ridden oil markets.
Home-builder confidence jumped in September, matching its highest reading in a decade. The National Association of Home Builders’ index jumped six points to 65 this month.
Despite some residual worries about Wednesday’s decision over whether US interest rates will be raised, the market has made up its mind that there will be no hike for now and focused instead on things more immediate. Markets also appeared to brush off news of New York’s weekend bomb blast and the discovery of another suspected device in Monday’s commute to work.
The market bellwether S&P 500 index was up 0.6% at 2,150 and led by Oneok Inc (NYSE:OKE) up 3.5% to $47.70 and General Motors Company (NYSE:GM) up 3.1% to $31.93.
GM shares rose after analysts at Morgan Stanley upgraded the auto firm's stock to "overweight" from "equal-weight" and raised their price target to $37 from $29.
The S&P Midcap 400 was up a hefty 1.3% at 1540 and led by Tech Data (NASDAQ:TECD) up 20.2% to $83.33 while second-highest riser was Avnet Inc (NYSE:AVT) up 8.7% to $42.63. There was a link between both risers.
Avnet, a leading global technology distributor, agreed on Monday to sell its technology solutions business unit to Tech Data in a stock and cash transaction valued at approximately $2.6bn.
The S&P Smallcap 600 index was up 1.1% at 748 and led by Bristow Group Inc (NYSE:BRS), up 10.4% to $12.64 and Basic Energy Services (NYSE:BAS), up 7.4% to $0.58 on the back of oil price gains.
The US oil benchmark West Texas Intermediate was up 2.4% to $44.05 on Monday.
Pre-Open
US shares are seen opening higher after Friday's losses as Wall Street appears to be shrugging off the weekend bomb in New York and looks ahead to Central Bank comment this week.
Commuters into the City had a torrid time on Monday morning after another suspect package was discovered in New Jersey.
A crude shrapnel bomb on Saturday night went off in the Chelsea area, injuring 29 people. A 28 year old man has now been identified as a suspect.
US stocks ended Friday lower after oil prices and a spat involving Deutsche Bank (NYSE:DB) saw investors flee energy and banking stocks – but shares were resilient on the week.
The S&P 500 bellwether closed down 0.4%, or 8.1 at 2,139. The Dow Jones lost 88 at 18,123 and the Nasdaq shed over five points at 5,119.
In futures today, the Dow Jones gained 90 points; the Nasdaq is 18 ahead and the S&P500 is over ten higher.
Last week was somewhat of a white knuckle ride for the US markets, with Fed speakers giving and removing hope of rates staying on hold next week, and data and oil prices adding to the gyrations.
On Wednesday, we will finally know whether the Federal Reserve will raise interest rates or not.
The general mood now is that there won't be a rise mainly after recent economic data, which has becalmed jumpy markets.
In company news, Samsung (NYSE: SSNLF) rallied in pre-market after it launched a replacement program South Korea for its Galaxy Note 7 devices after it recalled millions due to battery problems.