US open: Stocks rise as oil prices surge; weekly jobless claims fall

US stocks advanced on Thursday as oil prices rose and as jobs data showed an unexpected drop in weekly unemployment claims.

The Dow Jones Industrial Average rose 0.29%, the Nasdaq rallied 2.48% and the S&P 500 climbed 0.11% at the opening bell.

Oil prices surged after Iran unexpectedly welcomed Saudi Arabia and Russia’s plan to freeze production at January levels. However, Iran did not offer to take any action itself.

West Texas Intermediate crude jumped 3.3% to $31.73 per barrel and Brent crude increased 2.8% to $35.50 per barrel at 1415 GMT.

“Despite the fact that many members have nodded to keep their production at January levels or in other words at their record levels, the supply and demand equation will take some time to balance,” said Naeem Aslam, chief market analyst at AvaTrade.

“The Brent price has failed to break above its recent high of $36 despite the recent OPEC meeting. It appears that the price requires an astounding catalyst to break above this level and the upcoming crude inventory data due today could provide this.”

The Energy Information Administration will report crude oil stocks data at 1600 GMT.

Meanwhile, the Labor Department revealed jobless claims fell 7,000 to 262,000 in the week ending 13 February. This marked a three-month low and was much better than economists’ expectations for a 6,000 increase to 275,000.

Pantheon Macroeconomics said: “It's too soon to draw any definitive conclusions, but we think the data are consistent with the idea that the underlying trend in claims is more or less steady in the low 270s. Job losses among exporters and the oil sector are too small to make much difference to the aggregate number, given the strength of the domestic services economy.”

Less inspiring figures from the Federal Reserve Bank of Philadelphia showed manufacturing conditions in the Philadelphia region remained weak in February, albeit not as bad as expected. The diffusion index for current activity rose to -2.8 from -3.5 in January, slightly ahead of consensus estimates for a reading of -3 but marking the sixth consecutive month in negative territory. A reading below zero signals a contraction.

In corporate news, IBM was on the front foot after Morgan Stanley upgraded the stock to ‘overweight’.

Chip maker Nvidia was also in the black after its full year revenue beat expectations.

On the downside, Wal-Mart shares slumped in pre-market trade after the retailer’s fourth quarter sales missed expectations.

Perrigo was also under pressure after the drug maker’s fourth quarter profit fell short of analysts’ estimates.

The dollar fell 0.43% against the pound and dropped 0.18% against the yen but rose 0.45% against the euro.