US open: Gains for WTI send S&P 500 back into record territory

Action from Russia and Saudi Arabia to prop up oil prices boosted shares of oil service and marine transport firm and saw the S&P 500 move back into record territory.

At 1523 BST, the Dow Jones Industrial Average was up by 0.33% to 20,965.07 as the S&P 500 tacked on 0.41% to stand at 2,400.68 and the Nasdaq Composite climbed 0.34% to 6,141.73.

Oil prices rallied 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.

West Texas Intermediate crude oil futures was up 2.9% to $49.26 a barrel as a result and Brent crude was 2.6% higher at $52.22.

Although some traders were skeptical that such a deal would suffice, Capital Economics was not.

On Monday, its analysts told clients: "We estimate that if OPEC simply rolls over its cuts until March 2018, the market will be in an average deficit of about 1m bpd over the period."

That should be enough to drain oil stocks among OECD nations by roughly 360.0m barrels, far more than the 250m barrel depletion necessary to return inventories to their five-year average, they said.

Prices for copper and steel 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 Korean 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.

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.

In parallel, the NAHB's index of homebuilder confidence rose from a reading of 68.0 for April to 70.0 in May.

In corporate news, Goldman Sachs lifted its target price on Apple's shares from $164 to $170 on expectations the company will launch a superpremium smartphone in September - with a $1,000 price tag per set.

If proved correct, the new target would equate to a $900bn market capitalisation for the Cupertino, California-based firm.

Shares of Apple however were lower.

Moody's announced it would buy Bureau van Dijk for $3.3bn and Thermo Fisher drug ingredients-maker Patheon for $5.2bn.

JP Morgan revised its target for shares of Johnson&Johnson from $133 to $140 while Morgan Stanley downgraded Tesla to 'equalweight'.

Analysts at Oppenheimer upped their target on Amazon.com from $970 to $1,100.