The Dow rallied to fifth straight gain
The Nasdaq was up nearly 1% on broad technology gains
Crude hits multiyear high
Walmart lands in India with Flipkart deal
U.S. stocks closed solidly higher on Wednesday on a possible market melt-up ignoring the potential fallout from rising crude oil prices and news that the US would pull out of 2015’s Iran nuclear deal.
The major indexes shook off early weakness as both energy and technology gains led broad markets higher.
The Dow rallied to its fifth straight gain by adding 182.33 points, or 0.75% to close at 24,542.54 points.
The tech-heavy Nasdaq Composite closed 1% higher at 7,339.
Among notable energy stocks, Exxon Mobil Corp. (NYSE:XOM) gained 2.4% while Chevron Corp. (NYSE:CVX) was up 1.7%.
Shares of Applied Optoelectronics Inc. (NASDAQ:AAOI) fell 8.17% after the company reported weaker-than-expected earnings and revenue for the quarter ended March 31.
Afternoon trade:
US markets were gaining ground at midday, despite a big jump in crude oil and news that the US would pull out of 2015’s Iran nuclear deal.
The Dow industrials, S&P 500 and Nasdaq Composite all made modest gains, while the small-cap-centric Russell 2000 recovered after a brief turn into the red.
In Toronto, stocks were also trending to the upside after briefly going negative.
Crude oil has hit a three-year high, and could go even higher, as fallout from President Trump’s pullout from the Iran nuclear deal continues to be digested by Wall Street.
In company news, Walmart Inc (NYSE:AMT) shares sank on the announcement of a long-awaited deal for India e-commerce giant Flipkart. But the $16bn acquisition, which staved Amazon.com Inc’s (NASDAQ:AMZN) attempt to muscle in, was not well-received by neither investors nor analysts.
Beleaguered retail icon Sears Holdings Corp (NYSE:SHLD) saw shares accelerate after announcing a deal with Amazon to install tires purchased online at Amazon at Sears Auto Centers. The news sent shares of automotive service company Monro Inc (NASDAQ:MNRO) skidding.
Morning Trade:
US stocks started the day on the front foot as energy stocks pushed higher, helped along by a rally in oil prices. The upward trend in stocks and the jump in the oil price come in the wake of President Donald Trump’s decision to withdraw the U.S. from the Iran nuclear deal.
In early trade, the Dow Jones added 35 points to 24,395 while the S&P 500 climbed close to 8 points to 2,680. The tech-heavy Nasdaq, meanwhile, jumped by 12 points to 7,279 while up in Toronto, the TSX added 52 points to 15,894.
A barrel of West Texas Intermediate, the key US metric, jumped 2.4% to US$70.71 while a barrel of Brent Crude Oil, the international industry metric, punched above US$77 for the first time since November of 2014.
Oil and energy stocks swooped upwards in parallel fashion, with Occidental Petroleum gaining 7%; Marathon Oil up 6%; Noble Energy up 5.2%; and Newfield Exploration rising 5%
Also, on the list of winners in early trade was Tripadvisor which soared 22% after posting a surprise earnings and revenue beat. Shares in Sears also climbed 14% after the retailer reached a deal to offer full-service tire installation for orders from all tire brands on Amazon.
Walmart shares, meanwhile, lost 4% after the giant retailer agreed to buy a 77% stake in its Indian counterpart Flipkart for US$16bn.
Other laggards included Liberty Global PLC, which lost 8.4%, and Monster Beverage Corp, which shed 6.8%.
Pre-market trade:
European shares are generally in positive territory ahead of the Wall Street restart on Wednesday.
FTSE 100 is up around 45 points at 7,610 at the time of writing, while the German DAX is up around 15 and France's CAC 40 is ahead by 0.25.
On Wall Street yesterday, benchmark indices closed mixed to flat after President Donald Trump said the US was withdrawing from the 2015 Iran nuclear deal, which had been brokered by President Obama.
The Dow Jones closed 2.89 points ahead at 24,360, while the broader based S&P 500 shed 0.71 at 2,671 and the tech heavy Nasdaq was up 1.69 at 7,266.
Asian shares overnight were generally lower, with the Nikkei 225 in Japan shedding 99 points to 22,408, while in China, the Shanghai Composite Index closed 2.35 points lower, at 3,159.
The US decision caused the oil market to be rocked as the US will now impose "powerful" sanctions on the country. Crude oil dropped 1.7% but US crude today has recovered and is up over US$70 a barrel - up 2.49%.
Fiona Cincotta, senior market analyst at London based City Index, said earlier today: "Oil producers also started the day higher as oil prices hit a three and a half year high with Brent crude peaking at $76.75 a barrel in early trade while WTI reached $70.57/bbl, trading above $70/bbl for the first time since November 2014.
"The oil markets spun into an upward spiral following Donald Trump’s decision to withdraw the US from the Iran nuclear deal, a move which could mean renewed sanctions on Iran and a disruption of the global oil supply flow.
"In response, BP shares rose 1.77% to 559.90 and Royal Dutch traded up 1.73% at 2,594," she said.
Meanwhile, Wall Street futures are currently pointing to a significant higher start and recovery in New York, with the S&P 500 futures up 11 points, while the Nasdaq is ahead by 19 and the Dow Jones up 117.