Stocks rose in midday trading on Monday, led by gains in energy companies as the price of crude oil increased sharply.
Benchmark US crude rose $1.49, or 3.2 per cent, to US$47.70 a barrel following news of continued production troubles in Nigeria and an upbeat forecast from Goldman Sachs.
Analysts at the investment bank said the crude market has gone from oversupply to a “deficit” much earlier than it had expected. They expect the US crude to rise to about US$50 a barrel in the second half of this year.
Brent crude, which is used to price international oils, added US$1.27 to US$49.10 per barrel in London.
“If it’s oil making headline news, stocks will trade off of oil,” said Anna Rathbun, director of research for investment manager CBIZ Retirement Plan Services. She said she is sceptical there will be any “long-term rally” in stocks because companies are struggling to increase earnings.
The Dow Jones industrial average was up 144 points at 17,680 at midday Eastern time. The Standard & Poor’s 500 index was up 17 points at 2,064; while the Nasdaq composite gained 53 points at 4,770.