Oil surges 4 percent, helping Wall St. hit record peaks

Thu Aug 11, 2016 4:25pm EDT
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By Lewis Krauskopf

NEW YORK (Reuters) - Stocks in the United States and Europe raced higher on Thursday helped by encouraging corporate reports and a 4 percent surge in oil prices on comments from the Saudi oil minister and a forecast for a tighter crude market.

Major U.S. stock indexes closed at record highs. U.S. labor data showed a drop in jobless claims, and shares of department store operators Macy's (M.N: Quote) and Kohls (KSS.N: Quote) soared after their quarterly reports.

The energy sector .SPNY was the best-performing major S&P group, up 1.3 percent, buoyed by the rise in oil prices.

"Energy is such a common denominator for all economies that the sort of move that we’re seeing there has to be of reassurance," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio. "A week or so ago oil seemed to be tumbling again, and now we’ve come back to a level where it seems to be stabilizing."

The Dow Jones industrial average .DJI rose 117.86 points, or 0.64 percent, to 18,613.52, the S&P 500 .SPX gained 10.3 points, or 0.47 percent, to 2,185.79 and the Nasdaq Composite .IXIC added 23.81 points, or 0.46 percent, to 5,228.40.

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought out equities for yield.

The pan-European FTSEurofirst 300 stock index .FTEU3 climbed 0.9 percent to its highest close since late May helped by results from scents and flavors maker Symrise (SY1G.DE: Quote) and consumer group Henkel (HNKG_p.DE: Quote).

MSCI's all-world index .MIWD00000PUS rose 0.5 percent to nearly a year high for a fifth session of gains out of the past six.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., August 9, 2016. REUTERS/Lucas Jackson  - RTSM2SO