Wall St rises as oil rallies and banks gain

The ASX is set for a positive start after US stocks advanced, with energy stocks and banks the bright spots.

US stocks rose as oil prices gained, while investors looked ahead to tomorrow’s ECB meeting. Picture: AP Photo/Richard Drew.

US stocks rose overnight as shares of energy companies climbed with the price of oil and earnings reports offered fresh signs of profitability at banks.

European stocks also gained as investors looked ahead to the European Central Bank meeting tomorrow.

The Australian share market is set to follow suit, with ASX futures up 9 points at 7.25am (AEDT).

Better-than-expected results from Morgan Stanley and Halliburton on Wednesday helped the S&P 500 notch a second consecutive day of gains for the first time in nearly two weeks.

Stocks have struggled to hold a rally in recent sessions as earnings reports have provided a unclear picture of corporate health amid ongoing concerns about the slow pace of economic growth and stretched valuations.

“Earnings are just good enough to hold the line here,” said Phil Blancato, chief executive at Ladenburg Thalmann Asset Management.

The Dow Jones Industrial Average gained 41 points, or 0.2 per cent, to 18203. The S&P 500 rose 0.2 per cent, and the Nasdaq Composite advanced less than 0.1 per cent.

Energy stocks gained the most in the S&P 500, rising 1.4 per cent as the price of oil climbed to its highest level since July 2015. US crude added 2.6 per cent to $US51.60 a barrel after data showed a surprise reduction in US crude inventories last week . Halliburton rose 4.3 per cent after the oil-field services provider posted a surprise profit following a year of losses.

Financial stocks in the S&P 500 advanced 0.8 per cent after Morgan Stanley became the latest big US bank to beat analysts’ expectations, helped by a rebound in trading. Morgan Stanley added 1.9 per cent. Banks have been a bright spot in earnings season, with the KBW Nasdaq Bank Index of large US commercial lenders up more than 3 per cent this month.

The results from lenders in recent sessions “reframes the view of the largest banks in a more optimistic way,” said Tom Wright, director of equities at JMP Securities.

Yahoo rose 2.5 per cent after the company on Tuesday posted an increase in third-quarter profit, while shares of Intel slid 5.9 per cent after the company’s estimate for revenue came in slightly below projections.

US government bonds paused after a two-day rally, with the yield on the benchmark 10-year US Treasury note at 1.752 per cent, compared with 1.748 per cent on Tuesday.

The Stoxx Europe 600 rose 0.3 per cent. The retail sector led gains, while the telecom sector was the worst performer, with UK carrier Vodafone Group down 1 per cent.

European Central Bank officials hold a policy meeting in Frankfurt on Thursday. Many investors are expecting ECB President Mario Draghi to reassure the market about the bank’s expansive bond-purchase program after a report of a possible abrupt end to quantitative easing unsettled markets earlier this month.

Earlier, markets in Asia were mixed after data showed China’s economy expanded 6.7 per cent in the third quarter from a year earlier, in line with market expectations.

Investors have been watching data on the world’s second-largest economy more closely in recent sessions after surprisingly downbeat Chinese trade figures last week sparked losses in global equity markets.

Stocks in Hong Kong fell 0.4 per cent, while Shanghai shares were flat even as markets in Japan and Australia climbed, bolstered by Tuesday’s gains on Wall Street and rising oil prices.

Dow Jones