By Yasin Ebrahim
Investing.com – The Dow rallied on Thursday, but traders had to contend with another wild session on Wall Street, as oil prices mounted their biggest one-day percentage gain ever, overshadowing a record jump in jobless claims amid a coronavirus-led lockdown across swathes of the country, with infections topping 1 million worldwide.
The Dow rose 2.24%, or 470 points. The S&P 500 added 2.3% and the Nasdaq Composite was 1.7% higher.
Oil prices settled up 24%, their highest ever percentage gain, pushing energy stocks and the broader market higher, as President Donald Trump talked up the potential of a Russia-Saudi oil-production-cut agreement.
"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.
Reports that Russia is planning to stick it out with the lower oil price environment raised some concern that the Kremlin may be wary of striking a deal with Saudi Arabia to cut production. Russia's revised budget for 2020 reportedly shows the country is planning for a $20-a-barrel oil price environment, Bloomberg reported.
Meanwhile, Saudi Arabian officials said Trump's claims of cuts of more than 10 million barrels per day were an "exaggeration," The Wall Street Journal reported.
Even if managed, a 15 million bpd cut is unlikely to prevent glut in supply, with Stacey Morris at Alerian 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."
Ahead of nonfarm payrolls report due Friday, jobless claims were higher than expected with another 6.65 million Americans filing for first-time unemployment insurance last week.
Utilities and materials also contributed to broad-based rally, with the rising Covid-19 infections seemingly taking a back seat.
Coronavirus infections reached 1 million worldwide, with more than 50,000 dead so far.