U.S. stocks closed slightly higher on Wednesday, amid a sharp rebound in oil prices, while the Dow snapped a seven-day slide.
The Dow Jones industrial average closed about 40 points higher.Goldman Sachs and Apple contributed the most gains on the Dow. The S&P 500 ended 0.3 percent, led higher by financials and energy, and the Nasdaq outperformed, rising about 0.4 percent higher as Apple rose 1 percent.
Crude prices were broadly higher Wednesday, with U.S. oil settling 3.3 percent higher at $40.83 a barrel, after the Energy Information Administration said oil inventories rose 1.4 million barrels last week. The EIA also said, however, the number of gasoline barrels fell last week.West Texas Intermediate futures settled below $40 for the first time since April on Tuesday.
“I think people are looking at oil inventories as more of a supply issue, and that’s why it’s holding up,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “Supply can be controlled much more easily than demand.”
WTI briefly erased its gains right after the EIA’s data release.
“What we need get our arms around is oil,” said Art Hogan, chief market strategist at Wunderlich Securities, noting that Venezuela, Nigeria and Canada have restarted their oil production after a series of disruptions.
On the earnings front, several companies posted quarterly results before the bell, including Time Warner, which beat expectations on the bottom line. Time Warner shares were up more than 2.5 percent in afternoon trade ET.
“Earnings … have been pretty much as expected, but it’s too early to see what the impact of Brexit is going to be,” said Maris Ogg, president at Tower Bridge Advisors. “You’ve had management” not guiding positively.
Companies scheduled to report quarterly results after the bell includeTesla Motors, Marathon Oil, and Herbalife.
“Notwithstanding the better than expected print, the slowing hiring trend continues. The 3 month average job gain is now 174k and the 6 month average is 180k. These figures compare with job growth of 207k in 2015 and 234k in 2014. On one hand, employers are running out of qualified warm bodies to hire but also, slowing profits and shrinking profit margins don’t lend itself to a pick up in hiring,” Peter Boockvar, chief market analyst at The Lindsey Group, said in a note to clients.
That said, Wunderlich’s Hogan said “it doesn’t look like we’re going to slip back into that May aberration.” The ADP report is often used as a preview to the Bureau of Labor Statistics’ jobs report.
Other data released Wednesday included the July ISM services number,which showed expansion, but came in below estimates. The Markit Services PMI for July came in at 51.4, showing slight expansion. Any number below 50 indicates a contraction.
On Tuesday, the Dow notched its first seven-day losing streak since last year, albeit trading in a very narrow range.
“We’ve been down for seven days in a row, but if you add that up it doesn’t add up to 1 percent,” Hogan said.
Tower Bridge’s Ogg said she expects the market to remain in a tight range until after the U.S. presidential elections have concluded.
“Once Hillary [Clinton] gets elected, people … are going to breathe a sigh of relief,” she said, noting she sees very little chance of GOP candidate Donald Trump winning the election. “Once we get past the election, things are going to start clearing up.”
U.S. Treasurys were mostly flat, with the two-year yield trading at 0.66 percent and the 10-year yield around 1.54 percent. The dollar gained about 0.5 percent against a basket of currencies, with the euro near $1.115 and the yen around 101.2.
Overseas, Asian stocks traded mostly lower, with the Nikkei 225 falling 1.8 percent and the Shanghai composite gaining 0.24 percent. In Europe, stocks closed mixed.
The S&P 500 rose 6.76 point, or 0.31 percent, to close at 2,163.79, with energy leading six sectors higher and utilities the top decliner.
The Nasdaq composite gained 22 points, or 0.43 percent, to end at 5,159.74.
The CBOE Volatility Index (VIX), widely considered the best gauge off ear in the market, traded lower, near 12.8.
About two stocks advanced for every decliner at the New York, with an exchange volume of 883.89 million and a composite volume 3.665 billion at the close.
Gold futures for December delivery settled $7.90 lower at $1,364.70 per ounce.