Wall Street rises after three down days, tracks oil

Traders working on the floor of the New York Stock Exchange on Nov 23.
Traders working on the floor of the New York Stock Exchange on Nov 23. PHOTO: AFP

NEW YORK (REUTERS) - US stocks were higher on Thursday after three days of declines but pared some gains as oil prices fell to near seven-year lows.

Major US indexes have had a bruising week as a rout in oil prices made investors worry about economic growth.

Brent futures have fallen more than 11 per cent this month and prices extended their slide on Thursday as traders looked beyond a drop in US crude stockpiles to focus on a global supply glut.

"People tend to get a little bit spooked and feel low oil is a net negative (for the broader market), when really it's not,"said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.

"You could argue the S&P is a bit oversold right now after the three down days we've had," said Frederick, also citing technical trading after the S&P hit a 50-day moving average of 2054.

At 3.02pm, the Dow Jones industrial average rose 155.67 points, or 0.89 per cent, to 17,647.97, the S&P 500 gained 14.18 points, or 0.69 per cent, to 2,061.8 and the Nasdaq Composite added 40.09 points, or 0.8 per cent, to 5,062.95.

Investors are awaiting the Federal Reserve's meeting on Dec 15-16, when it is widely expected to raise interest rates for the first time in nearly a decade.

"The market is in a pause mode until we get some direction from the Fed," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"There is some amount of bargain hunting too as investors are price sensitive and we're going to see some sloppy trading today, because there is no major economic data or news."

Traders are pricing in an 85-per-cent chance of a rate hike next week, according to the CME Group's FedWatch.

Eight out of 10 major S&P 500 sectors were higher with the energy index's 1.4-per-cent rise leading the gainers. The index was clawing back some losses but still on track for a 7.3-per-cent decline for the month.

Data showed the number of Americans filing for unemployment benefits rose to a five-month high of 282,000 last week, but likely did not signal a deterioration in the labour market as the underlying trend remained consistent with tightening conditions.

Investors will likely focus more on Friday's retail sales data for November, which includes the start of the crucial holiday shopping season, according to Schwab's Frederick.

Men's Wearhouse fell 16.5 per cent to US$15.34, a day after the retailer warned it may miss the lower end of its fourth-quarter forecast.

Advancing issues outnumbered declining ones on the NYSE by 1,720 to 1,285, for a 1.34-to-1 ratio on the upside; on the Nasdaq, 1,674 issues rose and 1,105 fell for a 1.51-to-1 ratio favouring advancers.

The S&P 500 posted 4 new 52-week highs and 13 new lows; the Nasdaq recorded 25 new highs and 87 new lows.