Jump In Oil Prices Leads To Strength On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved sharply higher in early trading and remained firmly positive throughout the trading session on Monday. With the upward move on the day, the major averages added to the strong gains posted in the previous week.

The major averages moved roughly sideways going into the close, ending the day firmly in positive territory. The Dow jumped 228.67 points or 1.4 percent to 16,620.66, the Nasdaq soared 66.18 points or 1.5 percent to 4,570.61 and the S&P 500 surged up 27.72 points or 1.5 percent to 1,945.50.

The strength on Wall Street came amid a sharp increase by the price of crude oil, which has recently been a key driver of the markets.

Crude oil for March delivery surged up $1.84 to $31.58 a barrel after ending last week up $0.20 or 0.7 percent at $29.64 a barrel. The more actively traded April futures jumped $1.64 to $33.39 a barrel.

The price of crude oil has seen considerable volatility over the past few weeks amid speculation about the outlook for global production.

Overall trading activity remained somewhat subdued, however, as some traders stayed on the sidelines amid a lack of major U.S. economic data on the day.

The economic calendar will pick up in the comings days, with traders likely to keep an eye on reports on new and existing home sales, consumer confidence, and durable goods orders.

Earnings news from companies such as Home Depot (HD), Macy's (M), Target (TGT), Office Depot (ODP), J.C. Penney (JCP), and HP Inc. (HPQ) may also attract attention.

Sector News

The increase by the price of crude oil contributed to significant strength among energy stocks, which saw further upside after moving notably higher last week.

The NYSE Arca Natural Gas Index spiked by 4.7 percent, while the Philadelphia Oil Service Index and the NYSE Arca Oil & Gas Index shot up by 3.5 percent and 3 percent, respectively.

Substantial strength was also visible among steel stocks, as reflected by the 4.9 percent gain posted by the NYSE Arca Steel Index. With the gain, the index has reached its best closing level in well over a month.

Airline, telecom, railroad and computer hardware stocks also saw considerable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both advanced by 0.9 percent, while China's Shanghai Composite Index jumped by 2.4 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index surged up by 1.5 percent, the French CAC 40 Index and the German DAX Index jumped by 1.8 percent and 2 percent, respectively.

In the bond market, treasuries saw modest weakness amid the strength on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.8 basis points to 1.766 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on home prices, existing home sales, and consumer confidence