US stocks rise on higher oil, dovish Fed minutes

Traders work on the floor of the New York Stock Exchange, April 6, 2016.
Traders work on the floor of the New York Stock Exchange, April 6, 2016.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks rose solidly on Wednesday as higher oil prices lifted petroleum-linked shares and minutes from the Federal Reserve suggested the US central bank would keep interest rates low.

The Dow Jones Industrial Average gained 112.73 (0.64 per cent) to 17,716.05.

The broad-based S&P 500 added 21.49 (1.05 per cent) to 2,066.66, while the tech-rich Nasdaq Composite Index jumped 76.78 (1.59 per cent) to 4,920.72.

Dow member Chevron rose 2.3 per cent and Apache advanced 5.1 per cent as oil prices climbed more than 5 per cent, helped by a sharp fall in US commercial crude stockpiles.

Minutes from the Fed’s March policy meeting suggested broad consensus behind Chair Janet Yellen’s view that a sluggish global economy requires interest rates to stay low.

“Investors were somewhat concerned that there was perhaps a stronger tribe for more aggressive rate hikes and it really wasn’t apparent in the minutes,” said Jack Ablin, chief investment officer at BMO Private Bank.

 

Dow member Pfizer jumped 5 per cent and Allergan rose 3.5 per cent after the two companies withdrew their proposed US$160 billion (S$215 billion) merger following US Treasury restrictions discouraging cross-border deals designed to avert US taxes.

Other pharma stocks were also strong, with biotech companies gaining in part due to sentiment that they could become acquisition targets for Pfizer or Allergan. Amgen jumped 4.4 per cent, Biogen 5.3 per cent and Celgene 6 per cent.

Valeant Pharmaceuticals International surged 18.9 per cent after major investor and Valeant board member Bill Ackman said the pharma company would soon name a new chief executive.

Halliburton surged 5.9 per cent and Baker Hughes 8.8 per cent after the US Justice Department announced it was suing to block a proposed US$34.6 billion merger on antitrust grounds. The oil services companies said they would “vigorously contest” the case.

Beer, wine and spirits marketer Constellation rose 5.9 per cent as projected earnings of US$6.00-US$6.30 per year in fiscal 2017, compared with US$5.18 in 2016.

Big gainers in the Nasdaq included Amazon, up 2.7 per cent, and Tesla Motors, up 3.9 per cent. Apple rose 1.1 per cent.