Equity rally continues as crude prices rise on deal hope
By Chuck Mikolajczak
NEW YORK (Reuters) - Global equity markets rallied on Wednesday, as oil prices jumped on optimism that top crude producers could finalize a deal to freeze production, while the Mexican peso strengthened after the country's central bank hiked its benchmark interest rate.
After a surprise agreement on Tuesday between non-OPEC Russia and OPEC leader Saudi Arabia to freeze output at January levels, Iran's oil minister on Wednesday met counterparts from Venezuela, Iraq and Qatar, saying the proposed production "ceiling" should be the first step toward stabilizing the market.
Brent LCOc1 settled up 7.2 percent at $34.50 and U.S. crude CLc1 was up 5.6 percent at $30.66 a barrel.
Energy .SPNY and materials .SPLRCM shares led Wall Street higher, rising 2.9 percent and 2 percent, respectively. Nine of the 10 major S&P sectors were in positive territory.
"Oil continues to directionally trade with equities and oil prices are higher, and more important, economic data recently has been better than feared," said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City.
"Meanwhile, the backdrop for equities is oversold. ... This has certainly compelled some folks who are under-invested to get back into the stock market," he said.
The Dow Jones industrial average .DJI rose 255.37 points, or 1.58 percent, to 16,451.78, the S&P 500 .SPX gained 31.02 points, or 1.64 percent, to 1,926.6 and the Nasdaq Composite .IXIC added 98.11 points, or 2.21 percent, to 4,534.07.
The S&P 500 has climbed for three straight sessions, its longest streak of the year, after closing at a two-year low on Thursday. The 5.3 percent gain marks the best three-day performance for the index since August. Continued...