Stocks rally as oil and other commodities bounce back
Stocks traded higher Tuesday, following gains in overseas markets, as oil and other commodities attempted recovery from multi-year lows.
The Dow Jones industrial average gained more than 150 points. IBM (IBM), Boeing (BA) and UnitedHealth (UNH) were among the top gainers as all Dow components advanced.
All S&P 500 sectors traded higher, bringing the index back into positive territory for 2015 in intraday trade.
The Nasdaq composite held about 1 percent higher as biotech and major tech stocks advanced. Amazon (AMZN) briefly gained 2 percent in morning trade. Shares of Qualcomm (QCOM) held more than 2 percent higher amid news the chipmaker entered new license agreements with two Chinese firms.
“Generally a risk-on mode. The correlation has been such … that when oil is up, the markets take on a risk-on mode because (oil’s) the biggest risk,” said Ilya Feygin, managing director at WallachBeth Capital.
“There really isn’t much else going on other than this volatility in Asia and commodities,” he said.
Both WTI and Brent held more than 2.5 percent higher above $37.60 a barrel as of 10:46 a.m., ET. U.S. crude mostly continued to hold a slight premium to the internationally traded Brent.
Other commodities gained, with copper up more than 3 percent in mid-morning trade. Nine large copper smelters in China have agreed to cut sales of spot metal by as much as 200,000 tonnes in the first quarter of 2016 to counter low prices, according to an early Tuesday Reuters report, citing an executive at one of the smelters.
The Alerian MLP ETF (AMLP) (AMLP), which tracks large- and mid-cap energy master limited partnerships, reversed an initial rally to trade nearly 1 percent lower in mid-morning trade.
European stocks traded more than 1 percent higher. Asian equities closed higher, with Australia outperforming with a more than 1 percent gain.
In economic news, home values in October were 5.2 percent higher year-over-year, greater than the 4.9 percent annual gain in September, according to the S&P/Case-Shiller National Home Price Index that covers all nine U.S. census divisions.
Consumer confidence for December came in at 96.5, topping expectations.
Treasury yields were higher in mid-morning trade, with the 2-year yield (US2Y) briefly hitting a high of 1.075 percent, its highest since April 2010.
The U.S. dollar traded about 0.3 percent higher against major world currencies, with the euro near $1.093 and the yen at 120.44 yen against the greenback in mid-morning trade.
Tuesday is the second day of a shortened trading week, the last of the year. Markets are closed Friday for New Year’s Day.
Stocks closed well above session lows Monday but held lower as a renewed slide in oil prices weighed.
As of Monday’s close, the S&P 500 was 0.12 percent lower year-to-date, while the Dow Jones industrial average was down 1.65 percent for the year so far. The Nasdaq composite was up 6.44 percent for 2015.
About five stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 145 million and a composite volume of 634 million.
U.S. crude oil futures for February delivery gained 96 cents to $37.77 a barrel on the New York Mercantile Exchange. Gold futures for February delivery gained 70 cents to $1,069.00 an ounce as of 10:58 a.m., ET.