U.S. stocks advanced Wednesday for a third straight day, led by gains in energy and materials stocks as oil prices jumped.
Oil futures CLG6, +4.29% were soaring close to 4%, continuing their rebound off multiyear lows after U.S. crude inventories posted an unexpectedly large decline last week and as OPEC said it expects the price of its basket of crudes to rise to $70 a barrel in 2020. Prices — and energy stocks — could get another jolt around 1 p.m. Eastern Time, when rig-count data from Baker Hughes is released.
Investors also welcomed economic reports that pointed to a slow but steady improvement in consumer spending.
The S&P 500 SPX, +1.01% climbed 18 points or 0.9% to 2,057, with all 10 main sectors trading in positive territory, led by energy, which boasted a 3% gain thanks to a jump in crude-oil prices.
The Dow Jones Industrial Average DJIA, +0.83% gained 132 points, or 0.8%, to 17,551, while the Nasdaq Composite COMP, +0.69% rose 33 points or 0.7%, to 5,034.
“Economic data came in slightly better than expected and suggest that consumers are in reasonably good shape,” said Michael Arone, chief investment strategist at State Street Global Advisors’ US Intermediary Business.
Arone said sectors that are dependent on consumer spending, such as health care, technology and consumer discretionary plays, are likely to benefit from continued improvement in the economy.
Wednesday’s gains follow an upbeat session on Tuesday, when investors largely brushed off weak economic data. Trading was characterized by swings in and out of positive territory on seasonally light volume in the run-up to Christmas on Friday.
Economic data: Consumer spending rose 0.3% in November as expected, with that figure out early due to an inadvertent release, the Commerce Department said.
Orders for durable goods were flat last month following a 2.9% increase in October, slightly better than expected. The number would have been sharply negative if it weren’t for a big increase in orders from the Pentagon.
Personal incomes, meanwhile, grew 0.3% to continue a string of steady gains.
Consumer sentiment index rose to 92.6 in December from 91.3.
New home sales increased in November to a seasonally adjusted annual rate of 490,000, the Commerce Department said Wednesday. That was the highest in three months. Existing home sales data out on Tuesday showed resales plunged 10.5% in November to the slowest pace in nearly two years.
Movers & shakers: Freeport-McMoRan, Inc. FCX, +14.33% jumped 7.5%, while Range Resources Corp RRC, +10.16% rallied 6.8%, to lead gainers on the S&P 500.
Shares of Celgene Corp. CELG, +9.92% climbed 8% after the biotech company late Tuesday said it reached a settlement in a long-running patent dispute over its flagship blood-cancer drug Revlimid.
Adamas Pharmaceuticals Inc. ADMS, +53.68% surged 54% after the drugmaker released positive trial results for its Parkinson’s drug.
Micron Technology Inc. MU, -4.76% gave up 3.8% after the memory-chip maker late Tuesday provided a weak outlook.
Bed Bath & Beyond Inc. BBBY, -4.77% shares slid 5.3% after the retailer on Tuesday cut its guidance for the latest quarter.
Other markets: Asia markets closed mostly higher, while European stocks jumped.
Gold GCG6, -0.47% and silver SIH6, -0.20% declined, while the dollar traded mixed against other major currencies.
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