NEW YORK (Reuters) – U.S. stocks rose on Thursday after two days of declines, as energy shares rebounded with oil on concerns of supply disruption following attacks on two tankers in the Gulf of Oman.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 23, 2019. REUTERS/Brendan McDermid
U.S. Secretary of State Mike Pompeo said the United States has assessed that Iran is responsible for the attacks, which occurred near Iran and the Strait of Hormuz, through which a fifth of global oil consumption passes.
Oil futures ended more than 2% higher on the day, while the S&P 500 energy index gained 1.1%, the most of the 11 major sectors.
“We’re meandering here with strength in the oil sector because that’s where the market-moving news is today,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
“Whether it happens or not, and I kind of doubt it does, but if there’s broader escalation in the Gulf, it could imply tighter supplies temporarily,” he said.
Walt Disney Co gained 3.8%, giving the S&P 500 its biggest boost, after Morgan Stanley raised its forecast for Disney Plus subscriber growth.
Stocks have had a strong start to the month on hopes the Federal Reserve will act to counter a slowing global economy due to the escalating trade war with China, helping the benchmark S&P 500 index climb nearly 5% so far in June.
However, investors stayed cautious ahead of the Fed meeting next week and the G20 summit. Markets are anticipating an interest rate cut at some point this year.
The Dow Jones Industrial Average rose 42.76 points, or 0.16%, to 26,047.59, the S&P 500 gained 4.32 points, or 0.15%, to 2,884.16 and the Nasdaq Composite added 25.77 points, or 0.33%, to 7,818.49.
On the trade front, there were doubts of any improvement in what President Donald Trump called “testy” trade relations with China in the run up to the G20 summit later in this month.
Twitter Inc shares fell 3.5% after brokerage Moffett Nathanson said it expects the social media company’s costs to rise and revenue growth to slow.
Advancing issues outnumbered declining ones on the NYSE by a 2.33-to-1 ratio; on Nasdaq, a 2.13-to-1 ratio favored advancers.
The S&P 500 posted 31 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 54 new highs and 60 new lows.
Additional reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Chizu Nomiyama