By Yasin Ebrahim
Investing.com – The Dow climbed on Thursday, after briefly swinging negative as traders assess a potential Saudi-Russia agreement to cut production.
The Dow rose 1.39%, or 290 points, but had been 500 points up at the highs of the day. The S&P 500 added 1.45% and the Nasdaq Composite was 0.87 higher.
Oil prices settled up 24% after Trump stoked hopes of production cuts and an end to the Saudi-Russia price war
"Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" Trump tweeted.
The potential for a 15 million bpd cut, however, is unlikely to prevent glut in supply, with Stacey Morris at Alerian reportedly estimating the coronavirus impact had slashed demand by about 20 million bpd, The Wall Street Journal reported.
"Clearly, it's (the potential cut) better than the alternative of doing nothing and waiting for physical storage constraints to limit production," Morris said. "However, even if cuts total 15 million bpd, the global oil market could still be in an oversupply situation."
The rally on Wall Street comes even as jobless claims were higher than expected with another 6.65 million Americans filing for first-time unemployment insurance last week.
The bearish labor market report arrived ahead of the nonfarm payrolls due tomorrow, but it is unlikely to "reflect the true extent of job losses as the survey period covered the second week of March, before social distancing and business closures put millions out of work," RBC said.
Utilities and materials also contributed to broad-based rally, with the rising Covid-19 infections seemingly taking a back seat.
Coronavirus infections are nearing 1 million worldwide, with more than 50,000 dead so far.