News of Opec deal sparks US stock gains

Wall Street stocks earned a solid boost on Wednesday (Sept 28) after a tentative deal by Opec producers to cut oil output sent crude prices soaring over 5 per cent.
Wall Street stocks earned a solid boost on Wednesday (Sept 28) after a tentative deal by Opec producers to cut oil output sent crude prices soaring over 5 per cent.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks earned a solid boost on Wednesday (Sept 28) after a tentative deal by Opec producers to cut oil output sent crude prices soaring over 5 per cent.

The deal in Algiers, reported by Bloomberg, jolted oil sector shares higher, pulling the rest of the market along with them.

The Dow Jones Industrial Average finished up 0.6 per cent to 18,339.240.

The broad-based S&P 500 rose 0.5 per cent to 2,171.37, while the tech-rich Nasdaq Composite gained 0.2 per cent to 5,318.55.

Leading the way were the large oil producers, buoyed by the possibility that tighter supplies of crude could end the two-year slump in prices.

Exxon Mobil jumped 4.7 per cent, Chevron 3.3 per cent and ConocoPhillips 7 per cent.

Oilfield suppliers also gained: Schlumberger added 3.6 per cent, Halliburton 4.5 per cent, and Baker Hughes 3.7 per cent.

 

The Opec deal - which would be the first agreement to cut production by the cartel in eight years - still appeared tentative, after months of tussling between market powers Saudi Arabia and Iran over output caps.

A finalisation of the target for output, 32.5 million barrels a day according to Bloomberg, or 750,000 barrels lower that current levels, could come in an official Opec meeting in November.

"There are absolutely no specifics," said Mike Dragosits of TD Securities.

"It seems like it is more of a point to the November meeting, but the market is taking that as a positive news."

In other share action, Nike dropped 3.8 per cent after its fiscal first quarter report showed slumping orders and mounting inventory, causing a number of analysts to cut their target for the stock.

Shares of ailing Canadian smartphone pioneer BlackBerry jumped 5.7 per cent after it said it would stop making its own handsets and outsource the job to an Indonesian company.