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Oil stocks lead the way as stocks bounce back

Last updated: 17:48 05 Oct 2016 EDT, First published: 11:48 05 Oct 2016 EDT

Oil rig workers

Stocks rebounded on Wednesday, with the Dow Jones securing a triple-digit rise.

The Dow Jones industrial average rose 113 points to 18,281, with oil-related stocks leading the advance as the price of oil recovered.

The S&P 500 rose nine points to 2,160, while the mid-cap gauge, the S&P 400 climbed eight points to 1,542.

Small caps also had a solid day, with the Russell 2,000 index putting on nine points at 1,248.


Mid-session

Stocks have consolidated early gains, helped by some upbeat news from the services sector.

The Institute for Supply Management’s non-manufacturing purchasing managers’ index (PMI) rose to an 11-month high in September.

The PMI rose to 57.1 – a level above 50 indicates expansion – compared to expectations of a reading of 53.

The better-than-expected outcome gave a small fillip to already buoyant blue-chips, with the S&P 500 advancing to 2,163, up 12 points, while the Dow rose to 18,295, up 127 points.

The mid-cap S&P 400 was up 14 at 1,548, while the small-caps did better still, pushing up the Russell 2,000 index 14 points (1.1%) to 1,254.

Shares in Twitter (NYSE:TWTR) jumped by 5% to a high for the year as a new report tipped the social media giant for a bid as soon as this week.

A raft of potential suitors from Disney to Google has been suggested but one name consistently linked with the story is business and marketing software group Salesforce.com Inc (NYSE:CRM).

The rumors have not done any favors to the Salesforce share price, with the stock off 7% at US$67.57, making it the worst blue-chip performer.

Azz Inc (NUSE:AZZ), a provider of galvanizing services, was one of the few stocks on the NYSE to fare worse than Salesforce after it released its fiscal second quarter earnings report.

Net income slumped to US$10.02mln in the three months to the end of August from US$17.24mln the year before.

The appointment of Timothy Wright as chief research & development officer at Regulus Therapeutics Inc (NASDAQ:RGLS) went down well, with the shares advancing 11%.

Dr. Wright, who joined from the California Institute for Biomedical Research, will oversee Regulus's research, drug discovery, clinical development, and regulatory affairs functions.


Open

Oil stocks led the charge as buyers returned to the market this morning.

After an hour of trading the S&P 500 was up nine points at 2,160, wiping out virtually all of yesterday’s losses, while the more narrowly-based Dow Jones average was enjoying a triple digit rise, up 100 points at 18,268.

Yesterday’s surprise dip in US stockpiles, as announced by the American Petroleum Institute, has sent the price of the US benchmark, West Texas intermediate, heading to its highest level since the end of June.

The $50 level is in its sights as black gold for November deliver is now costing US$49.59 a barrel, up 90 cents on the day.

That surge has lifted the likes of Chesapeake Energy Corp (NYSE:CHK), up 3.5%, Transocean Ltd (NYSE:RIG) and Murphy Oil Corp (NYSE:MUR).

Other economic data providing a boost included the monthly private sector payrolls indicator from Automatic Data Processing. The payrolls processing firm said 154,000 jobs were added last month.

The mid-cap S&P 400 was also putting up a good show, adding 11 points at 1,545, while the small caps-focused Russell 2,000 was up nine points at 1,249,

Capricor Therapeutics, Inc. (NASDAQ:CAPR), a clinical-stage biotechnology company developing biological therapies for cardiac and other serious medical conditions, was wanted after it announced that its Phase II ALLSTAR clinical trial has completed patient enrollment.

The shares hardened 11% to US$3.50. The ALLSTAR (ALLogeneic Heart STem Cells to Achieve Myocardial Regeneration) trial is evaluating CAP-1002 (allergenic cardiosphere-derived cells) in adults with cardiac dysfunction following a large heart attack.

Interpace Diagnostics (NASDAQ:IDXG) was another health-related company celebrating a green light, in its case from the New York State Department of Health, which has reviewed and approved for marketing ThyGenX, the company's NextGen Sequencing oncogene panel for indeterminate thyroid nodules. The shares rose 6.7%.

Heading the other way was Immunomedics Inc (NASDAQ:IMMU) after it announced plans to raise around US$30mln through the issue of shares and warrants at three bucks a throw.

The shares tumbled 88.5 cents to US$2.395.


Preview

After taking a bath yesterday, stocks are set to claw back some losses today, as investors eye Friday’s release of the September jobs data.

The benchmark S&P 500 looks likely to open at a little below 2,157, up six points or so on last night’s close.

The more narrowly-based Dow Jones average is looking at a rise of around 50 points after closing 85 points lower yesterday at 18,168.

Oil stocks might get a lift from yesterday’s stockpiles data from the American Petroleum Institute, which showed inventories declined last week by 7.6mln barrels, confounding expectations of an increase.

The Energy Information Administration’s update on weekly stockpiles will be released later today.

The price of gold has rallied a tad today after declining 3.5% yesterday following hawkish speeches from central bankers and the strength of the greenback, which pushed the price below the US$1,300 an ounce level.

Gold for December delivery was US$7.60 higher, or up 0.6%, at US$1,277.60 an ounce.

In pre-market trading, Constellation Brands Inc (NYSE:STZ) was up 3.5% at US$165.85 after the beer and wine maker announced better-than-expected sales and profits for the fiscal second quarter.

Medical equipment maker Edwards Lifesciences Corporation (NYSE:EW) edged higher in screen-based trading, adding 1.1% at US$119.17 as it received a CE Mark for its Acumen Hypotension Probability Indicator (HPI).

The CE mark opens the way for the HPI to be marketed in Europe.

Computer memory chip maker Micron Technology Inc (NASDAQ:MU) was down by just over 1% ahead of the official start of trading after it made a loss in the final quarter of its fiscal year.

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