Wall St gains as oil surge eclipses massive jobless numbers

Credit: REUTERS/CARLO ALLEGRI

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Exxon, Chevron top gainers on Dow

Energy index rises the most among major S&P sectors

Initial jobless claims top 6 mln last week

Walgreens biggest pct loser on Dow

Indexes up: Dow 1.80%, S&P 2.01%, Nasdaq 1.52%

Updates to early afternoon

By Medha Singh and Uday Sampath Kumar

April 2 (Reuters) - Wall Street bounced on Thursday as hopes of a truce between Saudi Arabia and Russia to cut oil output drove a record 22% surge in prices, outweighing the shock of over 6 million Americans filing for jobless claims due to virus-led lockdowns.

The S&P energy index .SPNY, down by half this year, climbed 10%, with big gains for majors Exxon Mobil Corp XOM.N and Chevron Corp CVX.N powering a near 2% rise for both the S&P 500 .SPX and the Dow Jones .DJI.

Saudi Arabia has called for an emergency meeting of oil producers, while U.S. President Donald Trump said he expected the kingdom and Russia to cut output by as much as 10 million to 15 million barrels a day. O/R

"The surge in crude is helping the mood, so we're seeing some relief in markets that have been hammered," said Richard Steinberg, chief market strategist at Colony Group, in Florida.

The list of top gainers on the benchmark S&P 500 was dominated by oil companies. Apache Corp APA.N, Diamondback Energy Inc FANG.O and Helmerich Payne HP.N advanced between 14% and 16%.

Brent LCOc1 was on track for its biggest one-day gain on record, but prices are still far from recovering last month's steep losses.

A bump in prices may still not be enough to save some of the debt-laden U.S. shale companies that are on the brink of bankruptcy as demand continues to plunge, wrought by the coronavirus pandemic.

Analysts foresee a further decline in U.S. stocks as country-wide shutdowns to limit the spread of the virus result in a virtual halt in business activity and force companies to lay off employees and save cash.

Boeing Co BA.N, once a symbol of America's industrial might, has offered buyout and early retirement packages to employees.

Meanwhile, initial claims for unemployment benefits last week rose to 6.65 million, exceeding the top end of economists' estimates at 5.25 million.

"They are really eye popping numbers, but at the end of the day it doesn't really tell the whole story because we knew they were going to be bad," said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management in New York.

"The real question is what happens by the end of the year."

At 12:52 p.m. ET the Dow Jones Industrial Average .DJI was up 377.55 points, or 1.80%, at 21,321.06, the S&P 500 .SPX was up 49.73 points, or 2.01%, at 2,520.23 and the Nasdaq Composite .IXIC was up 112.09 points, or 1.52%, at 7,472.67.

Walgreens WBA.O fell 7% after the drugstore retailer reported a steep decline in U.S same-store sales in the last week of March. L4N2BQ32Z

Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE and a 1.90-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and eight new lows, while the Nasdaq recorded three new highs and 70 new lows.

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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