NEW YORK (Reuters) - Oil prices jumped after Russia said it was ready to meet with other producers to discuss the market, while world stock indexes rose with commodity-related shares amid a backdrop of low global interest rates.
The S&P 500 rose for a fifth straight session for the first time this year, helped by increases of more than 2 percent in S&P’s energy .SPNY, materials .SPLRCM and industrials .SPLRCI indexes.
The S&P health index .SPXHC, up just 0.3 percent, underperformed the broader market with biotechs falling as sector sentiment tumbled alongside shares of Canada’s Valeant Pharmaceuticals VRX.TO VRX.N and after industry complaints the Trans-Pacific Partnership agreement falls short on patent protection for drugs.
Valent’s U.S. shares slid 10.3 percent to $163.46.
News that Nelson Peltz’s Trian Fund Management disclosed a roughly 1 percent stake worth $2.5 billion in GE (GE.N) lifted GE’s stock 5.3 percent to $26.82, the biggest positive influence on the S&P 500.
“The market was a bit oversold,” said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. “Energy stocks are very oversold so they’re a big contributor to the rally today. Commodity names seem to be catching a bit of a bid. We’re still looking for low interest rates and the Fed to be on hold for a while.”
The Dow Jones industrial average .DJI rose 304.06 points, or 1.85 percent, to 16,776.43, the S&P 500 .SPX gained 35.69 points, or 1.83 percent, to 1,987.05 and the Nasdaq Composite .IXIC added 73.49 points, or 1.56 percent, to 4,781.26.
European stocks surged, with the FTSEuroFirst 300 index .FTEU3 in Europe ending up 3 percent. Data showing euro zone business activity grew at its weakest pace in four months during September reinforced expectations monetary policy backdrop will remain equity-friendly.
MSCI’s all-country world index .MIWD00000PUS was up 1.9 percent.
Oil prices climbed after the news on Russia, with Brent LCOc1 settling at $49.25 a barrel, up $1.12 or 2.3 percent. and U.S. oil’s West Texas Intermediate (WTI) crude CLc1 up 72 cents, or 1.6 percent, to settle at $46.26.
Russia, one of the world’s top three oil producers, said it was prepared to meet OPEC and non-OPEC oil producers to discuss the market if such a meeting is called.
Moscow had been unwilling in the past to cut its oil output to support prices.
The U.S. dollar rose against a basket of major currencies on renewed investor risk appetite in the wake of a disappointing U.S. jobs report.
A U.S. rate hike is expected to boost the dollar by driving investment flows into the United States. While the dollar has previously weakened on expectations for later Fed rate hikes, the greater risk appetite took precedence on Monday.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was last up 0.26 percent at 96.081, marking a recovery from a nearly two-week low of 95.218 hit Friday
Before Friday’s jobs data, the Fed had been widely expected to raise U.S. interest rates by year-end. It decided not to change its policy path in September.
Japan's Nikkei .N225 ended the day up 1.6 percent, while Chinese markets were closed for a holiday.
Analysts said the Bank of Japan could ease policy as soon as this week, though action at its Oct. 30 meeting may be more likely.
In the bond market, U.S. Treasuries prices fell, with benchmark yields climbing from their lowest since April, as weak services sector data supported the view that the Fed is unlikely to raise rates soon, spurring investors to move into stocks from bonds.
The Institute for Supply Management said its gauge on U.S. services industries fell to its lowest level since June.
U.S. benchmark 10-year Treasury notes US10YT=RR were down 20/32 in price to yield 2.059 percent, up 7 basis points from late Friday. The 10-year yield touched 1.904 percent on Friday, which was its lowest since late April, according to Reuters data.
Gold was little changed, as profit-taking set in after a rally. Spot gold XAU= had turned down 0.1 percent at $1,136.11 an ounce. Copper prices jumped.
Additional reporting by Sam Forgione and Sinead Carew in New York and Nigel Stephenson in London; Editing by Bernadette Baum and Cynthia Osterman