Investing.com – Wall Street shrugged off warnings from the International Monetary Fund (IMF) on the global economy and a not-so-auspicious beginning to the first quarter earnings season and moved higher on Tuesday as gold hit new 2016 highs on a reported agreement over a production freeze ahead of Sunday’s meeting in Doha.
At 16:05GMT or 12:05ET, the Dow Jones rose 131 points, or 0.74%, while the S&P 500 gained 14 points, or 0.67%, and the tech-heavy NASDAQ Composite traded up points, or 0.35%.
Investors remained focused on a new jump in crude oil after Interfax reported that Russia and Saudi Arabia had reached a consensus on a production freeze, suggesting a change to the latter’s stance. The kingdom had said that it would not agree if Iran did not form part of a deal.
Oil increased gains on the report and U.S. crude futures soared 3.10% to $41.61 by 16:07GMT or 12:07ET, while Brent oil jumped 3.48% to $44.32.
The news arrived ahead of a long-awaited meeting of major oil producers in Doha on April 17 and while market participants awaited U.S. inventory data later on Tuesday from the American Petroleum Institute, followed by the official stockpiles data from the EIA out on Wednesday.
In that context, stocks paid little heed to gloomy outlook on the global economy by the IMF that, as expected, cut growth forecasts on Tuesday.
The news however did push the dollar to an eight-month high as investors took refuge in the safe-haven investment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.06% at 94.03, at 16:13GMT or 12:13ET.
The economic calendar was light with U.S. import prices rising less than expected and export prices remaining flat in March, in a reading that could imply that Federal Reserve (Fed) chair Janet Yellen was right in looking past headline inflation with her dovish stance on monetary policy.
Nonetheless, although Philadelphia Fed president Patrick Harker said in prepared remarks delivered on Tuesday to a local business group in Philadelphia that “it might be prudent to wait until the inflation data are stronger before we undertake a second rate hike”, he did show a more hawkish stance in the Q&A suggesting that the Fed could definitely raise the price of money at least three times this year.
Dallas Fed president Robert Kaplan, meanwhile, also said that he would like to see more data before beginning to tighten monetary policy and felt April would be too soon. However, Kaplan did say a hike could be on the table for June.
San Francisco Fed President John Williams and Richmond Fed President Jeffrey Lacker were due to speak later Tuesday.
In company news, Alcoa (NYSE:AA) fell more than 3% on after providing a dismal unofficial start to the U.S. earnings season after the market close on Monday.
The metals company and former Dow component reported that quarterly profit fell due to lower commodity prices, the stronger U.S. dollar and plant closures or divestments and also cut its forecast for global sales in the aerospace industry this year.
In other earnings news, Fastenal Company (NASDAQ:FAST) shed almost 3% after earnings per share missed consensus, while Perry Ellis International Inc (NASDAQ:PERY) jumped 4% on a mixed earnings report.
CSX (NASDAQ:CSX) was among companies scheduled to report after the close.