While you were sleeping: Oil rebound lifts Wall St

Wall Street rose, as a recovery oil prices offered investors confidence to pick up beaten-down stocks.

Goldman Sachs said the sell-off was overdone.

In 12.40pm trading in New York, the Dow Jones Industrial Average climbed 1.4%, while the Nasdaq Composite Index rose 1.6%. In 12.25pm trading, the Standard & Poor's 500 Index gained 1.2%.

"We've seen such a strong selloff and moved into correction territory for the year, there's more of a 'sentiment-in-momentum' trade that is underway rather than a focus on fundamentals," US Bank chief private client group investment officer Bill Northey told Reuters.

Rallies in shares of Exxon Mobil and those of Chevron, last trading at 4.8% and 4.4% higher respectively, led the gain in the Dow.

Energy stocks moved higher with oil prices. Brent crude traded 1.5% higher at $US30.76 a barrel while US crude's West Texas Intermediate traded 55c stronger at $US31.03 a barrel.

"That rise in the price of oil off the lows sends a nascent sense of stability to investors," Washington-based Commonwealth Foreign Exchange chief market analyst Omer Esiner told Bloomberg.

But the slump in oil prices remains a concern for the pace of inflation, including for US Federal Reserve policy makers.

"Headline inflation will return to target once oil prices stabilise, but recent further declines in global oil prices are calling into question when such a stabilisation may occur," St Louis Fed president James Bullard told the Economic Club of Memphis.

"With renewed declines in crude oil prices in recent weeks, the associated decline in market-based inflation expectations measures is becoming worrisome," according to Mr Bullard.

“For the macro economy as a whole, the relatively low crude oil prices the US is enjoying today are likely a bullish factor.”

Goldman strategist Abby Joseph Cohen told Bloomberg TV the recent slide in equities was failing to take into account the outlook for the US economy and American corporate profits. "We need to put things into perspective. Stocks are probably the best place to be."

The number of applications for US unemployment benefits unexpectedly rose last week. A Labor Department report showed initial jobless claims climbed 7000 to 284,000 in the week ended January 9.

"Claims are still low from a historical perspective, and we see little evidence in this morning's report to suggest anything other than healthy labour market separations," New York-based Barclays economist Jesse Hurwitz told Reuters.

A separate Labor Department report showed import prices fell 1.2% in December from the prior month, the sixth straight monthly decline.

Shares of JPMorgan Chase went up 2.4%, after the bank reported a better than expected quarterly profit.

In Europe, the Stoxx 600 Index finished the day with a 1.5% decline from the previous close. The UK's FTSE 100 Index dropped 0.7%, Germany's DAX Index sank 1.7%, while France's CAC 40 Index retreated 1.8%.

(BusinessDesk)

Wall Street rose, as a recovery oil prices offered investors confidence to pick up beaten-down stocks.

Goldman Sachs said the selloff was overdone.

In 12.40pm trading in New York, the Dow Jones Industrial Average climbed 1.4%, while the Nasdaq Composite Index rose 1.6%. In 12.25pm trading, the Standard & Poor's 500 Index gained 1.2%.

"We've seen such a strong selloff and moved into correction territory for the year, there's more of a 'sentiment-in-momentum' trade that is underway rather than a focus on fundamentals," US Bank chief private client group investment officer Bill Northey told Reuters.

Rallies in shares of Exxon Mobil and those of Chevron, last trading at 4.8% and 4.4% higher respectively, led the gain in the Dow.

Energy stocks moved higher with oil prices. Brent crude traded 1.5% higher at $US30.76 a barrel while US crude's West Texas Intermediate traded 55c stronger at $US31.03 a barrel.

"That rise in the price of oil off the lows sends a nascent sense of stability to investors," Washington-based Commonwealth Foreign Exchange chief market analyst Omer Esiner told Bloomberg.

But the slump in oil prices remains a concern for the pace of inflation, including for US Federal Reserve policy makers.

"Headline inflation will return to target once oil prices stabilise, but recent further declines in global oil prices are calling into question when such a stabilisation may occur," St Louis Fed president James Bullard told the Economic Club of Memphis.

"With renewed declines in crude oil prices in recent weeks, the associated decline in market-based inflation expectations measures is becoming worrisome," according to Mr Bullard.

“For the macro economy as a whole, the relatively low crude oil prices the US is enjoying today are likely a bullish factor.”

Goldman strategist Abby Joseph Cohen told Bloomberg TV the recent slide in equities was failing to take into account the outlook for the US economy and American corporate profits. "We need to put things into perspective. Stocks are probably the best place to be."

The number of applications for US unemployment benefits unexpectedly rose last week. A Labor Department report showed initial jobless claims climbed 7000 to 284,000 in the week ended January 9.

"Claims are still low from a historical perspective, and we see little evidence in this morning's report to suggest anything other than healthy labour market separations," New York-based Barclays economist Jesse Hurwitz told Reuters.

A separate Labor Department report showed import prices fell 1.2% in December from the prior month, the sixth straight monthly decline.

Shares of JPMorgan Chase went up 2.4%, after the bank reported a better than expected quarterly profit.

In Europe, the Stoxx 600 Index finished the day with a 1.5% decline from the previous close. The UK's FTSE 100 Index dropped 0.7%, Germany's DAX Index sank 1.7%, while France's CAC 40 Index retreated 1.8%.

(BusinessDesk)