Bullish oil market boosts risk appetite

US stocks closed higher on Monday lifted by optimism over rising oil prices as comments by Saudi Energy Minister and Russian President Putin bolstered expectations OPEC would reach a deal to cut production. The dollar strengthened: the live dollar index data show the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, rose 0.2% to 96.872.

The Dow Jones industrial average rose 0.5% to 18329.04 led by 2% jump in shares of Exxon Mobil and 1.8% gain in Apple and Merck shares. The S&P 500 closed 0.5% higher settling at 2163.66 led by 1.5% gain in energy stocks. The Nasdaq composite ended 0.7% higher at 4893.77. Energy companies advanced after Saudi Arabia’s energy minister Khalid al-Falih said he was optimistic that major oil producers could agree to cut production this year and crude price could rise to $60 a barrel. Russian President Vladimir Putin’s confirmation of his intention to freeze or even cut crude output added to market optimism. No important economic data were released on Monday as government offices were closed for Columbus Day holiday. Earnings season unofficially begins today with Alcoa Inc. reports. Expectations are not different from previous quarters with S&P 500 constituents expected to extend their earnings recession to a sixth straight quarter. Declining earnings are limiting advances in market indexes together with expectation of a rate hike by Federal Reserve by the end of the year. Today at 12:00 CET National Federation of Independent Business August Small Business Index will be released. The tentative outlook is positive for dollar. At 16:00 CET Labor Market Conditions Index will be published, and at 20:00 CET September Federal Budget will be published.

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