Stocks posted solid gains on Tuesday, led by energy companies, after news reports said Saudi Arabia and Russia were working toward an agreement to cut oil production.
Investors also worked through the initial batch of earnings from the first quarter of the year.
The Standard & Poor’s 500-stock index climbed 19.73 points, or 1 percent, to 2,061.72 and the Nasdaq composite increased 38.69 points, or 0.8 percent, to 4,872.09.
The Dow Jones industrial average rose 164.84 points, or 0.9 percent, to 17,721.25.
Corporate earnings got underway on a weak note after Alcoa, the aluminum mining company, reported a 15 percent decline in revenue late Monday. Alcoa also had a huge drop in first-quarter profit from a year earlier as aluminum prices fell. Shares of Alcoa fell 26 cents, or 2.7 percent, to $9.48 on Tuesday.
This week, big United States banks will start releasing their results, including JPMorgan Chase, Citigroup and Wells Fargo. Investors will be watching the banks to see how well they have weathered the market’s recent volatility. Banks are often seen as a proxy for how the economy is doing.
“It’s not going to be a clean earnings season for financials at all,” said Peter Stournaras, a portfolio manager at BlackRock. “The banks have suffered from fears about oil loans, but those fears are overblown.”
Expectations for earnings are low this quarter. Analysts surveyed by FactSet expected corporate profits to be down 9.1 percent from a year ago, hurt primarily by the drop in oil prices and other commodities. The entire energy sector is expected to report a loss this quarter, according to FactSet.
“Earnings will paint an important picture over the next few weeks, but the more important story is the continued improvement in the macroeconomic environment here in the U.S. and globally,” said Ryan Larson, head of United States equity trading at RBC Global Asset Management in Chicago.
Oil prices moved sharply higher after Russian officials told Interfax, the Russian news agency, that they planned to reach a deal with Saudi Arabia to cut oil production. OPEC m
inisters are set to meet Sunday in Doha, Qatar.
Benchmark American crude oil climbed $1.81, or 4.5 percent, at $42.17 a barrel in New York. Brent crude, the international standard, rose $1.86 to $44.69 a barrel in London.
Energy stocks, which have been beaten down in recent months, followed the price of crude oil higher. The energy component of the S.&P. 500 rose almost 3 percent
Government bond prices fell. The yield on the 10-year Treasury note rose to 1.78 percent, from 1.73 percent Monday.
The euro fell to $1.1397 from $1.1412 while the dollar rose to 108.53 yen from 107.94 yen.
In other energy commodities, heating oil rose 6 cents to $1.276 a gallon, wholesale gasoline rose 3 cents to $1.534 a gallon and natural gas rose 9 cents to $2.004 per thousand cubic feet.
Precious and industrial metals prices closed broadly higher. Gold gained $2.90 to $1,260.90 an ounce, silver rose 25 cents to $16.22 an ounce and copper climbed 6 cents to $2.15 a pound.
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