US: Wall St opens higher as oil recovers some losses

FEB 3, 201611:02 PM

[NEW YORK] US stocks opened higher on Wednesday as oil prices rose after two straight days of losses and data showed that the private sector added more jobs than expected in the United States.

Oil prices pared some losses after Russia reiterated its openness to talking with OPEC about output cuts, which helped revive hope among investors that the world's largest producers could act to boost prices.

Shares of oil majors Exxon and Chevron were up about 1 per cent.

Oil prices have fallen about 70 per cent in the past 18 months, hit by a growing glut and cooling economic growth in China and other emerging markets.

Falling oil prices, tepid U.S. growth and fears regarding a China-led global slowdown have been major factors for a torrid start to the year for stocks. The S&P 500 is already down 6.9 per cent this year. "The market is likely to take its cue today again from oil prices," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"Lower oil prices are a sign of weak global economic activity. And that's why we have this correlation between oil and other markets." At 9:38 am ET (1438 GMT) the Dow Jones industrial average was up 74.44 points, or 0.46 per cent, at 16,227.98, the S&P 500 was up 6.75 points, or 0.35 per cent, at 1,909.78 and the Nasdaq Composite index was up 13.32 points, or 0.29 per cent, at 4,530.27.

Comcast rose 3.2 per cent to $56.30 after the company posted better-than-expected revenue. The stock was the biggest boost on the S&P and the Nasdaq.

Nine of the 10 major S&P sectors were higher with the materials index's 1.56 per cent rise leading the advancers. The energy index gained 1.1 per cent.

Investors have been keeping a keen eye on US economic data for clues regarding the pace of future rate hikes by the Fed. Fed fund futures are pricing in only one hike this year.

Investors were also assuaged after New York Fed President William Dudley said in an interview that continued tightening of financial conditions would weigh on the decisions of the Fed's policy board.

Payrolls processor ADP showed that private employers added 205,000 jobs in January, higher than the 195,000 expected by economists polled by Reuters. The data comes ahead of the more comprehensive employment report by the US government on Friday.

Weak quarterly earnings by US corporations are adding to the worries. Fourth-quarter S&P 500 earnings are expected to have fallen 4.4 per cent from a year earlier, according to Thomson Reuters data.

Merck fell 1.7 per cent to US$49.59 after the drugmaker reported lower-than-expected revenue.

Match Group slumped 18 per cent to US$9.99 after the owner of Tinder mobile app reported revenue that fell short of expectations.

Chipotle Mexican Grill was down 4.4 per cent at US$455.76.

Advancing issues outnumbered decliners on the NYSE by 2,016 to 628. On the Nasdaq, 1,362 issues rose and 833 fell.

The S&P 500 index showed 14 new 52-week highs and 9 new lows, while the Nasdaq recorded 9 new highs and 25 new lows.

REUTERS