Energy Shares Gain on Prospects for OPEC Deal
U.S. stock futures inched higher Monday as a jump in commodities prices boosted shares of energy and mining companies.
Investors largely brushed off news over the weekend that North Korea tested a new type of missile and a global cyberattack hit computers around the globe. Shares of Symantec, a maker of antivirus software, climbed over 5.6% in premarket trading, but moves in traditional safe haven assets, including government bonds, gold and the yen, were muted.
Futures pointed to a 0.2% opening gain for the S&P 500, with oil drillers Transocean and Schlumberger and natural gas giant Chesapeake Energy among the best performers in premarket trading. Europe's oil and gas sector -- the only one in negative territory for the year -- climbed 1.3%, despite a 0.2% decline in the wider Stoxx Europe 600 index.
Brent crude oil rose 3.2% to $52.48 a barrel after top energy officials in Saudi Arabia and Russia said they would back a nine-month extension to a production-cut deal led by the Organization of the Petroleum Exporting Countries.
"We have, before coming to this announcement today, reached out to many of our colleagues within and outside OPEC, and I think there is general consensus that this is the right approach and the right thing to do," Saudi Arabia's energy minister Khalid al-Falih said.
Currencies of oil-linked economies strengthened against the dollar Monday, with the Russian ruble up 1.4%, and the Canadian dollar and the Norwegian krone both up 0.7%.
Shares of miners also advanced on gains in base metals prices after Chinese President Xi Jinping pledged more than $100 billion in new financing as part of a mega-infrastructure project.
In currencies, the euro rose 0.4% against the dollar to $1.0979. Speculative euro positions surged into positive territory for the first time since May 2014, according to the most recent CFTC data, as investors drew encouragement from French election results and improving economic data.
The WSJ Dollar Index edged down 0.3% after falling Friday on slightly weaker-than-expected inflation and retail sales reports.
Still, investors continue to bet the economy will be strong enough for the Federal Reserve to raise interest rates in June. Fed-funds futures tracked by CME Group, which are used by investors to bet on central bank policy, currently suggest a 69% chance of a rate rise next month, down from 83% a week ago.
"More recent figures haven't been great, but certainly this year we've had fairly strong [economic] numbers out," said Paul Flood, multiasset manager at Newton Investment Management.
"As long as you've got economic growth, you tend to favor equities or equity-like instruments over bonds," he said.
Yields on 10-year Treasurys were little changed Monday at 2.334% from 2.331% Friday. Yields move inversely to prices.
Earlier, Chinese stocks and bonds rose amid signs Beijing will take a softer approach to reducing leverage and preventing risks in the debt-laden financial system.
The Shanghai Composite gained 0.2% despite data showing China's economic activity weakened more than expected last month. Value-added industrial output, a rough proxy for growth, rose by 6.5% in April from a year earlier, well below economists' forecasts.
Hong Kong's Hang Seng Index rose 0.9% amid gains in companies based in mainland China and Friday's release of better-than-expected first-quarter economic growth. Chinese technology giant Tencent Holdings continued to help the index hit a series of 22-month highs.
Japan's Nikkei edged down 0.1%, while South Korea's Kospi rose 0.2%.
Kenan Machado
,
Shen Hong
, Neanda Salvaterra and
Ian Talley
contributed to this article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 15, 2017 09:04 ET (13:04 GMT)