U.S. Stocks Open Higher on Surprise by Russia and Saudis
Futures for the DOW were up 59 points early Monday while, the same for the S&P 500 were higher by 5.3 points. Nasdaq futures were up 7.75.
The small increases come after bourses in the U.S. closed lower on Friday, after retail sales and inflation missed forecasts and gave a mixed outlook of the U.S. economy.
On Friday, the Dow and S&P 500 were both down while the Nasdaq ended slightly higher.
On Monday, with crude prices increasing by over 2% the market was more positive. The advances came after energy ministers from Russia and Saudi Arabia released a joint statement that said they favor an extension of nine months to the current agreement for production cuts, which is three months longer than analysts were expecting.
The proposed 9-month extension will still need to be confirmed by the 13 members of OPEC when they meet for their scheduled meeting May 25 in Vienna.
A market analyst on Wall Street said that the financial markets showed signs they were stabilizing on Monday, but with a sparse amount of key data from the U.S. this week, a threat continues to have a corrective move.
However, he added, market sentiment for equities has not become negative and was holding up, with the price of oil having continued its recovery as Saudi Arabia and Russia the two largest producers of oil in the world, proposed an extension of the cuts in production to March of 2018.
The optimism from rising prices of oil was able to largely overshadow the increased tensions during the weekend related to North Korea.
The nation tested a ballistic missile on Sunday over the Sea of Japan, seen, as a challenge to the new South Korea president.
Energy related companies were the largest gains before the opening bell Monday. Chesapeake Energy shares gained 3.2%, while NRG Energy was up 1.2% and Apache Corp moved up 1.1%.
Alphabet Inc., the parent company of Google, gained over 0.4% in thin trading before the bell. Waymo, the Alphabet driverless car arm and Lyft the ride-hailing startup announced on Sunday the two would work together in developing technology for autonomous vehicles.
That announcement was seen as another possible blow to Uber Technologies, just when the ride-hailing rival of Lyft is headed for a battle in court with Alphabet over technology for autonomous cars.