US stocks closed higher on Monday after oil prices scaled a 14-month high after Russia weighed in its support for an OPEC-brokered glut cut.
The S&P 500 market bellwether closed up 0.5% at 2163 after US crude oil jumped 3.1% to $51.53, its highest settlement since July 2015.
The gains came after Russian president Vladimir Putin said the huge oil producer would support an OPEC deal to cap production hammered out last month at a meeting in Algiers, but still requiring finalising ahead of a meeting in November.
This week also sees the start of the third quarter earnings season. Earnings of S&P 500 companies are forecast to have fallen about 1% point on a year-on-year basis in the third quarter, extending the US profit recession to five quarters — the longest since the 2008 financial crisis.
Although the top gainers on the S&P 500 unsurprisingly included oil stocks such as NRG Energy (NYSE:NRG) up 4% at $11.42, Devon Energy (NYSE:DVN) up 3.7% to $44.39, and Pioneer Natural Resources Co (LON:PXD) up 3.7% to $193.24, the biggest gainer – from the very start of the session no less – was pharma stock Mylan (NASDAQ:MYL) up 8.2% to $38.87 after settling a dispute with the US government over its pricing and classification of the anti-allergy drug EpiPen.
The S&P Midcap 400 ended up 0.8% at 1545 and led by Denbury Resources (NYSE:DNR) up 6.7% to $3.18, Sm Energy Company (NYSE:SM) up 5% to $41.27 and Patterson-UTI Energy (NYSE:PTEN) up 4.5% to $24.05.
The S&P Smallcap 600 ended up 1% at 756 and led by restaurant group Ruby Tuesday (NYSE:RT) up 9.4% to $2.56 after bouncing back from its poor earnings last week and investor expectations of an improved strategy for the near 100-year-old casual diner chain.
Midsession
US shares advanced in early trading on Monday thanks to a combination of gains by pharma stock Mylan (NASDAQ:MYL) and a surge by oil prices above $50 a barrel.
The S&P 500 rose 0.7% to 2168 and was led by Mylan up 9.6% to $39.39 after late on Friday reports that the company agreed to pay the US government $465mln to settle disagreements about its EpiPen classification. Last week, Mylan had been accused of overcharging Medicaid for its EpiPen treatment because of the classification.
Murphy Oil (NYSE:MUR) was a top-three gainer up 3.8% to $30.63 after oil gained. The US benchmark West Texas Intermediate was up 3.3% to $51.43 – as the fuel rose above the psychologically important $50 a barrel mark.
Deutsche Bank’s ADRs (NYSE:DB) were up 1.7% at $13.88 although it was unclear whether whispers were out that the bank had concluded week-long discussions about a possible commuted penalty for Germany’s biggest lender from US regulators. Pre-market the stock was up 1% at $13.77, so the advance since then would indicate upside tailwinds from the bourse’s overall gains.
Shares of Netflix (NFLX) halved their pre-market losses to 0.8% at $104 after being initiated with a Sell rating and $90 downside price target by analysts at Deutsche Bank who said that a sale of the company is unlikely. The broker also believes that the market's expectations for the company through 2020 appear to be too high.
The S&P Midcap 400 index was up 1.2% to 1552 and led by oil companies Denbury Resources (NYSE:DNR), Sm Energy (NYSE:SM) and Energen Corp (NYSE:EGN).
Meanwhile, the S&P Smallcap 600 was up 1.3% at 758 and led by Tidewater Inc (NYSE:TDW).
Although no US data is scheduled for this session politics is likely fill the void and to weigh heavily after calls from many on the Republican wing of the United States for their candidate Donald Trump to withdraw from the presidential race after making derogatory comments about women.
Canadian markets were closed for Thanksgiving on Monday.
Pre-Open
US shares are indicated opening higher on Monday, led by a regulatory breakthrough for Mylan (NASDAQ:MYL) and in the absence of domestic data releases this session. The S&P 500 market bellwether is seen opening around 0.4% higher on Monday, according to futures indications. But weighing on the bourse will be no sign yet of a breakthrough in the week-long discussions about a possible commuted penalty for Deutsche Bank (NYSE:DB) from US regulators. For now, the ADRs are up 1% at $13.77 pre-market. Talking of settlements, US pharma Mylan shares (NASDAQ:MYL) are 11.3% higher at $40.01 pre-market on news after-hours on Friday that the company agreed to pay the US government $465mln to settle disagreements about its EpiPen classification. Last week, Mylan had been accused of overcharging Medicaid for its EpiPen treatment because of the classification. Mylan shares already advanced by 10% after hours on Friday on the news. Meanwhile, ADRs of SoftBank Grp (OTCMKTS:SFTBY), the Japanse IT company said to be looking at cooperating with Korea's Samsung in the Internet of Things space, could come under pressure after the leading Korean smartphone maker had to halt output of its flagship Galaxy Note 7 devices following reports that even with replacement batteries the gadgets were at risk of catching fire. On Friday, SoftBank’s ADRs closed up 0.2% at $31.82. Shares of Netflix (NFLX) were down 1.5% to $103.28 pre-market after being initiated with a Sell rating and $90 downside price target by analysts at Deutsche Bank who said that a sale of the company is unlikely. The firm also believes that the market's expectations for the company through 2020 appear to be too high. Although no US data is scheduled for this session politics is likely fill the void and to weigh heavily after calls from many on the Republican wing of the United States for their candidate Donald Trump to withdraw from the presidential race after making derogatory comments about women.