Wall Street set for first weekly gain of 2016 as oil soars

By Abhiram Nandakumar

(Reuters) - Wall Street rallied on Friday, heading towards its first positive week of 2016, as a cold snap in the United States and Europe helped send oil prices surging for a second day.

All 10 major S&P sectors were in the black, led by a 3.34 percent jump in energy stocks <.SPNY>.

Crude prices, still under pressure from a global glut, were up nearly 8 percent as freezing conditions and snowstorms boosted short-term demand for heating oil and traders cashed in their short positions.

European Central Bank President Mario Draghi's comments on Thursday suggesting that the bank could ease its monetary policy at its March meeting also encouraged investors bruised by a brutal selloff that began at the start of 2016.

 

The U.S. stock market has failed to sustain any rallies this year as risk-averse investors search for signs of stability amid worries of a China-led global slowdown.

Up to Thursday's close, the S&P 500 had fallen 8.6 percent in 2016, having closed higher in only six of the 13 sessions.

"I do think that even just to get a couple of days here with neutral, rather than downward, movement is going to be a positive because it's going to settle some fears," said Paul Springmeyer, senior portfolio manager at the private client reserve at U.S. Bank in Minneapolis.

"Long term, the stability of the U.S. economy is really what's at play here and all signs, with low inflation and low oil prices, are pointing to an ability to move forward and move higher," Springmeyer added.

U.S. economic data on Friday showed existing home sales soared nearly 15 percent in December, handily beating estimates and recovering from a 10.5 percent fall in November.

At 12:37 p.m. ET (1737 GMT), the Dow Jones industrial average <.DJI> was up 137.66 points, or 0.87 percent, at 16,020.34, the S&P 500 <.SPX> was up 28.5 points, or 1.52 percent, at 1,897.49 and the Nasdaq Composite index <.IXIC> was up 90.06 points, or 2.01 percent, at 4,562.11.

Apple was up 3.9 percent at $100.10 and gave the biggest boost to the S&P 500 and the Nasdaq. Piper Jaffray's Gene Munster advised investors to buy into the iPhone maker heading into its quarterly results next week.

Fourth-quarter earnings reports are likely to offer little cheer, with S&P 500 companies on average expected to post a 4.3 percent decline in profit, according to Thomson Reuters data.

Shares of General Electric were down 2.3 percent at $27.94 after the company's quarterly revenue missed analysts' estimates.

American Express was down 12 percent at $55.14 after the company issued disappointing earnings forecast.

The two stocks were the biggest losers on the Dow.

Schlumberger was up 4.8 percent at $64.42 after the world's biggest oilfield services company reported better-than-expected profit and set a $10 billion buyback programme.

Advancing issues outnumbered decliners on the NYSE by 2,740 to 337. On the Nasdaq, 2,195 issues rose and 555 fell.

The S&P 500 index showed two new 52-week highs and seven new lows, while the Nasdaq recorded eight new highs and 34 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)