US close: Nasdaq, S&P 500 hit records as oil prices rally
US stocks ended higher on Monday, with the S&P 500 and the Nasdaq hitting fresh records as oil prices rallied and cyber security companies got a boost from the global cyber attack.
The Dow Jones Industrial Average closed up 0.4% to 20,981.94, the S&P 500 gained 0.5% to 2,402.32 and the Nasdaq added 0.5% to 6,149.67.
Energy shares were lifted as oil prices gushed higher after Saudi Arabia's energy minister Khalid al-Falih and Russian energy minister Alexander Novak said in Beijing that a joint deal to cut crude supplies would be extended until the end of March 2018 from the middle of this year. The 2016 agreement was to cut output by 1.8m barrels a day in the first half of this year and Russia said this latest agreement is expected to be on the same terms.
At the time of the US close, West Texas Intermediate was up 1.9% to $48.75 a barrel and Brent crude was 1.7% higher at $51.70.
IG analyst Chris Beauchamp said: "OPEC and its allies have been on manoeuvres once more, repeating their view that more production cuts are necessary in order to avoid another supply glut. This has helped oil prices to move higher once more, but the cartel appears to get diminishing returns each time it announces a reduction in output. They will need to go big on the cuts theme at their May meeting in Vienna, to avoid a sense of disappointment creeping in."
Metals prices were also given a boost as Chinese President Xi Jinping said over the weekend that the 'One Belt, One Road' infrastructure initiative will get financing of $78bn as Beijing looks to strengthen infrastructure and trade links with the rest of the world.
With the focus firmly on oil, investors shrugged off geopolitical tensions after North Korea tested another ballistic missile over the Sea of Japan at the weekend, and weaker-than-expected retail sales, industrial production and fixed asset investment data from China.
On the US data front, the 'Empire State' manufacturing index retreated from a reading of 5.2 in April to -1.0 for May, easily undershooting forecasts for a reading of 7.0. Meanwhile, the NAHB's index of homebuilder confidence rose from a reading of 68.0 for April to 70.0 in May.
On the corporate front, cyber security firms were in demand after the 'WannaCr' ransomware attack that hit last Friday, with Symantec, Palo Alto Networks and FireEye all in the black.
Elsewhere, Google parent Alphabet rose edged up after its driverless car division, Waymo, and ride-hailing company Lyft said they would work together to develop autonomous vehicle technology.
Patheon surged after Thermo Fisher Scientific said it was buying the company for $7.2bn including $2bn of net debt, while Moody’s was on front foot after announcing it will buy Dutch business intelligence group Bureau van Dijk for €3bn.