Investing.com -- U.S. stocks rose sharply on Wednesday, completing one of their strongest two-day rallies since late-March, as crude futures hit fresh 6-month highs while testing a key technical level at $50 a barrel.
Oil prices rose more than 1% in Wednesday's session after the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories fell by 4.2 million barrels for the week ending on May 20, defying expectations for a 2.0 million build. With next week's OPEC meeting looming, crude futures are up more than 14% since negotiations at a closely-watched OPEC-Non OPEC summit last month ended prematurely. Representatives from the 13-nation oil cartel, however, are not expected to reach a deal on a comprehensive production freeze at the meeting in Vienna, as Iran stands firm on a stance of increasing output to reach 2007 pre-sanction levels.
The Dow Jones Industrial Average rose 145.46 or 0.82% to 17,851.51, while the NASDAQ Composite index added 33.83 or 0.70% to 4,894.89, as the major indices turned positive for the month of May. The S&P 500 Composite index, meanwhile, jumped 14.48 or 0.70% to 2,090.54, as nine of 10 sectors closed in the green. Stocks in the Energy and Basic Materials industries led, each gaining more than 1%. Stocks in the Utilities sector lagged, as investors eschewed high-dividend defensive plays.
The top performer on the Dow was Goldman Sachs Group Inc (NYSE:GS), which added 4.05 or 2.57% to 161.64. Earlier this week, CNBC reported that the Wall Street bank is looking actively into expanding further into the fintech start-up market, as traditional revenue streams continue to dry up due to an increased regulatory climate. Investors also continue to stake bets on a summer interest rate hike from the Federal Reserve, which many analysts regard as a bullish development for the financial industry. Last Wednesday, the SPDR XLF Financial Sector ETF posted one of its largest one-day rallies in weeks after minutes from the Fed's April meeting provided strong indications that the U.S. central bank could raise rates when it meets next in June. The worst performer was Nike Inc (NYSE:NKE), which fell 0.51 or 0.89% to 56.09. It came one day after Nike's arch-rival UA inked a record 15-year, $280 million team apparel sponsorship with UCLA, expanding its footprint into the West Coast.
The biggest gainer on the NASDAQ was Western Digital Corporation (NASDAQ:WDC), which rose 1.91 or 4.52% to 44.19, after analysts at Barclay's updated the hard disk manufacturer's rating from "overweight," to "equal weight." The worst performer was Yahoo! Inc (NASDAQ:YHOO), which slipped 1.96 or 5.22% to 35.57. Yahoo shares fell sharply on Wednesday after Bloomberg reported that AT&T Inc (NYSE:T) could enter the bidding for the Sunnyvale, California-based company's core internet business.
The top performer on the S&P 500 was Transocean, which soared 0.88 or 9.54% to 10.10. Despite the upswing in global oil prices, shares in the offshore drilling contractor are still down more than 50% over the last year. Yahoo was also the worst performer on the S&P, just below Williams Companies Inc (NYSE:WMB), which fell 0.88 or 3.98% to 21.25. Williams Companies officials announced on Wednesday that it has scheduled a special meeting of shareholders on June 27 to vote on a proposed $37.7 billion merger with Energy Transfer Equity. On Wednesday, the Securities and Exchange Commission (SEC) declared ETE's pending acquisition of Williams to be effective in a Form S-4 filing.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,052-965 margin.