Metal prices rise after China promises to boost infrastructure spending
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U.S. stocks were set to kick off the week in an upbeat mood Monday, with oil prices rallying after Saudi Arabia and Russia called for an extension to OPEC's production cut deal.
Futures for the Dow Jones Industrial Average gained 59 points, or 0.3%, to 20,907, while those for the S&P 500 index added 5.30 points, or 0.2%, to 2,394. Futures for the Nasdaq-100 index put on 7.75 points, or 0.1%, to 5,696.75.
The small gains come after U.S. bourses closed mostly lower on Friday (http://www.marketwatch.com/story/us-stocks-poised-to-open-lower-with-spotlight-on-retail-sales-inflation-data-2017-05-12), after inflation and retail sales missed forecasts and painted a mixed picture of the country's economy. The S&P 500 slipped 0.2%, while the Dow average fell 0.1%, with both benchmarks snapping a three-week winning streak. But the Nasdaq Composite Index edged slightly higher on Friday and logged a fourth straight weekly gain.
On Monday, the market took a more positive tone as crude oil prices jumped more than 2% to trade at a two-week high (http://www.marketwatch.com/story/crude-oil-jumps-to-2-week-high-as-saudis-russia-back-continued-output-cuts-2017-05-15). The advances came after the energy ministers of Saudi Arabia and Russia said in a joint statement that they back a nine-month extension (http://www.marketwatch.com/story/saudi-arabia-russia-back-9-month-extension-to-opec-output-deal-2017-05-15) to current production cuts -- three months longer than what analysts had expected.
The proposed extension still needs to be confirmed when the 13 members of the Organization of the Petroleum Exporting Countries gather for a closely watched meeting in Vienna on May 25.
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"Markets have showed signs of stabilizing a bit this morning, but with little key U.S. data due this week, there is a threat of a continued corrective move," said Richard Perry, market analyst at Hantec Markets, in a note.
"However, market sentiment on equities is not negative and is holding up, with the oil price having continued to recover as Russia and Saudi Arabia (the world's two largest oil producers) propose extending the production cuts into March 2018," he added.
The optimism over rising oil prices largely overshadowed rising tensions over North Korea over the weekend. The country tested another ballistic missile over the Sea of Japan on Sunday (http://www.marketwatch.com/story/north-koreas-ballistic-missile-launch-viewed-as-challenge-to-new-president-in-south-2017-05-13), seen as a direct challenge to the newly elected president of South Korea.
Stock movers: Energy companies were among biggest premarket gainers on Monday. Shares of Chesapeake Energy Corp.(CHK) climbed 3.2%, NRG Energy Inc.(NRG) added 1.2% and Apache Corp.(APA) put on 1.1%.
Shares of Alphabet Inc.(GOOGL) (GOOGL) gained 0.4% in thin premarket trade. Waymo LLC, the driverless car division of the Google parent, and ride-hailing startup Lyft Inc. said Sunday they would work together to develop autonomous vehicle technology (http://www.marketwatch.com/story/waymo-lyft-to-collaborate-on-self-driving-cars-2017-05-15).
The announcement is seen as another potential blow to rival Uber Technologies Inc., just as the company is headed for a court battle with Alphabet (http://www.marketwatch.com/story/the-biggest-heavyweight-silicon-valley-legal-fight-of-our-time-is-driving-forward-2017-05-13) over a key technology for self-driving cars.
Economic news: The Empire state manufacturing index for May is due at 8:30 a.m. Eastern Time, followed by the home builders index for the same month at 10 a.m. Eastern.
There are no Federal Reserve speakers scheduled to appear before Thursday.
Other markets: Stocks in Asia closed mostly higher (http://www.marketwatch.com/story/asian-markets-largely-surge-ahead-despite-global-risks-2017-05-14), with investors largely ignoring a batch of disappointing Chinese data and instead focusing on China's "One Belt, One Road" infrastructure program.
President Xi Jinping over the weekend said there will be more than $100 billion in fresh financing (http://www.marketwatch.com/story/xi-casts-china-as-guardian-of-globalization-as-he-pledges-100-billion-to-one-belt-one-road-2017-05-15) in support for the initiative, a bid to link regions via infrastructure projects that is seen as a bid to reshape the geopolitical world order by casting China as the protector of globalization.
The pledge to boost infrastructure spending also helped lift metals, with platinum logging the biggest gain at 1.2%. Gold was up 0.1% at $1,229.10 an ounce.
The dollar traded lower against most other major currencies, while European stock markets were mixed (http://www.marketwatch.com/story/european-oil-mining-shares-bounce-up-outpacing-broader-market-2017-05-15).
(END) Dow Jones Newswires
May 15, 2017 05:32 ET (09:32 GMT)