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Midday Update: Stocks Trim Gains on Reversal in Oil; Manufacturing Indices Touch 2-Yr Highs

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Stocks were trading higher for the first time in four days, but surrendered most of their opening gains in sympathy with a dramatic sell-off in oil futures.

Brent crude oil fell by more than $2 per barrel on the combination of a technically-driven correction and concerns among oil traders that members of the Organization of the Petroleum Exporting Countries will adhere to production cuts. As a result, the price of a barrel of Brent crude tumbled from $58.13 per barrel at Tuesday's open to $55.37 per barrel.

Wall Street snapped a three-day losing streak at the open as investor's appetite for risk was rekindled by strong U.S. manufacturing data, and expectations for 2017 to bring economic prosperity. Nike ( NKE ) and Verizon ( VZ ) led Dow advancers, while energy and telecom stocks were the top performing sectors of the S&P 500.

Leading manufacturing indices were at two-year highs, exceeding bullish expectations. The Institute for Supply Management's December index rose to 54.7 from 53.2 previously, while the final purchasing managers December manufacturing index rose to 54.3 from 54.1 in November.

Additionally, construction spending surged 0.9% to its highest level in more than 10 years.

European markets closed higher with Tuesday's gains fueled by bullish manufacturing data from China and the U.S. China's Caixin manufacturing index, which improved to 51.9 last month from 50.9 previously, beating expectations to decline slightly to 50.7. Mining stocks outperformed, pacing gains in energy shares amid expectations for robust economic growth to drive demand for commodities.

Crude oil was down $0.84 to $52.88 per barrel. Natural gas was down $0.39 to $3.29 per 1 million BTU. Gold was up $9.60 to $1,161.30 an ounce, while silver was up $0.45 to $16.44 an ounce. Copper was down $0.01 to $2.49 per pound.

Among energy ETFs, the United States Oil Fund was up 2.39% to $11.44 with the United States Natural Gas Fund down 11.60% to $8.26. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 2.56% to 21.45 while SPDR Gold Shares were up 0.89% to $110.59. The iShares Silver Trust was up 2.85% to $15.54.

Here's where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was up 51.16 points (+0.46%) to 11,108.05

Dow Jones Industrial Index was up 42.17 points (+0.21%) to 19,803.88

S&P 500 was up 9.95 points (+0.44%) to 2,248.78

Nasdaq Composite Index was up 23.85 points (+0.44%) to 5,406.86

GLOBAL SENTIMENT

FTSE 100 was up 35.06 points (+0.49%) to 7,177.89

DAX was down 14.09 points (-0.12%) to 11,584.24

CAC 40 was up 16.95 points (+0.35%) to 4,899.33

Nikkei 225 was down 30.77 points (-0.16%) to 19,114.37

Hang Seng Index was up 149.84 points (+0.68%) to 22,150.40

Shanghai China Composite Index was up 32.28 points (+1.04%) to 3,135.92

NYSE SECTOR INDICES

NYSE Energy Sector Index was up 48.04 points (+0.42%) to 11,551.80

NYSE Financial Sector Index was up 47.12 points (+0.68%) to 7,008.66

NYSE Healthcare Sector Index was up 43.00 points (+0.38%) to 11,951.83

UPSIDE MOVERS

(+) IDXG (+184.73%) Signs an agreement with Blue Cross Blue Shield Association Center for Clinical Effectiveness to support enhanced coverage

(+) ALJ (+8.26%) Delek Holdings ( DK ) agreed to acquire remaining outstanding shares of Alon

(+) FNBC (+7.53%) Sold nine branches and certain assets and liabilities to Whitney Bank

(+) LEI (+6.45%) Acquires lease agreement for Permian basin property for $1.43 million

DOWNSIDE MOVERS

(-) ITEK (-72.13%) Phase 3 trial of Trabodenoson for treatment of glaucoma did not meet primary endpoints

(-) EIGI (-16.94%) Downgraded at Goldman Sachs to sell from neutral

(-) XRX (-15.57%) Completed its divesture of Conduent ( CNDT )

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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