The Dow industrials and the S&P 500 climbed Wednesday toward fresh multi-month highs, buoyed by a rally in crude-oil prices to above $51 a barrel and a dollar that's hovering around a one-month low.
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The Dow briefly topped the psychologically important 18,000 level, while the S&P remained firmly above the 2,100-point level -- both significant technical indicators that, according to analysts, could determine whether the main benchmarks will push toward fresh all-time highs.
The S&P 500 gained 5 points, or 0.2%, to 2,117, moving less than 1% off its record of 2,130.82, set May 21, 2015.
Materials and industrial shares led gains, up 0.8% and 0.7% respectively. The only two sectors in negative territory were telecom and consumer discretionary, down 0.5% and less than 0.1%, respectively.
The Dow Jones Industrial Average added 49 points, or 0.3%, to 17,986, led by a 2.1% rise in shares of Caterpillar Inc.(CAT) and a 1.4% gain in UnitedHealth Group Inc.(UNH).
Analysts focused on the 18,000-point level as a significant technical indicator for the Dow, after the blue-chip gauge briefly broke above that level on Tuesday for the first time since April and continued to flirt with that number on Wednesday.
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Meanwhile, the Nasdaq Composite was up 5 points, or 0.1%, at 4,966.
The equity market resumed its strong correlation with moves in oil prices in the last few sessions, said J.J. Kinahan, chief strategist at TD Ameritrade.
Oil prices traded above $51 a barrel -- a nearly 11-month high -- after data from the Energy Information Administration showed that inventories fell roughly in line with expectations. Earlier data showed crude imports into China rose 39% in May from the year-ago period, in part on demand from privately owned refineries.
The correlation between oil and stocks had somewhat eased in the last two months, falling from the peak reached in February and March, Kinahan said. But it has reappeared recently, after Federal Reserve Chief Janet Yellen said Monday the next interest-rate hike might be pushed back.
Amid tumbling rate-hike expectations, "oil is something to trade on after the Fed is out," Kinahan said.
Still, "it has been a slow crawl higher in the wake of last Friday's U.S. employment report and the subsequent dovish tone to Yellen's speech on Monday," said Simon Smith, chief economist at FxPro, in a note.
"Once again, this demonstrates the waning impact that low rates and monetary policy in general is having on stocks and asset markets in general," he added.
On Wednesday, investors seemed to shrug off news that companies had a record number of open jobs in April.
But the tumbling dollar, which weakened Wednesday to its lowest level in a month, boosted investor appetite for stocks, said John Conlon, chief equity strategist at People's United Wealth Management. That's largely because a weakening buck is expected to boost U.S. corporate earnings after the dollar's strength battered corporate earnings, especially among exporters, over recent quarters, Conlon added.