While you were sleeping: UPDATED Oil, stocks climbs on Opec deal

Oil prices jumped, while stocks on Wall Street rose, on a report that Opec has reached an agreement to limit output.

The Organisation of the Petroleum Exporting Countries (Opec) agreed to reduce its oil output to 32.5 million barrels per day (bbl/d) from the current production levels of about 33.24 million bbl/d, Reuters reported, citing two Opec sources.

The oil producing group will agree concrete levels of production by each country at its next formal meeting in November, the sources said.

One also said that once production targets were reached, Opec would reach out to non-member producers for co-operation.

Crude futures jumped 4.6% to $US46.78 after the Reuters report.

Dow rises 111 points
Wall Street also gained on the new. At the close, the Dow Jones Industrial Average climbed 110.94 points, or 0.6%, while the Nasdaq Composite Index climbed 0.1% to 5318.55. Trading, the Standard & Poor's 500 Index finished 0.5% higher at 2171.37.

"The market is rewarding the show of co-operation," John Kilduff, a partner at Again Capital, a New York hedge fund focused on energy, told Bloomberg.

"Their acts haven't matched their words so far but the market is giving them the benefit of the doubt. The desperation of Saudi Arabia to reach an agreement is readily apparent and increases the chances of success," he said.

In the Dow, gains in Exxon Mobil and Caterpillar shares, up 4.1% and 3.2% respectively, outweighed slides in shares of Nike and McDonald's, down 4.3% and 1.7% respectively.

Chevron shares also rose, trading 2.8% higher.

Nike shares dropped after the company's future orders, a key barometer of demand for its products, fell short of analysts' estimates.

In testimony to US lawmakers in Washington, Federal Reserve chairwoman Janet Yellen said the central bank expected the US jobless rate to fall further and that the growth pace of the economy points to a gradual increase in interest rates.

Deutsche Bank recovers on sale news
In Europe, the Stoxx 600 Index finished the day with an advance of 0.7%, bolstered by a gain in Deutsche Bank shares.

The UK's FTSE 100 Index rose 0.6%, while Germany's DAX Index gained 0.7%, and France's CAC 40 Index added 0.8%.

Shares of Deutsche Bank rose as it agreed to sell its UK insurance unit and chief executive officer John Cryan ruled out a capital increase.

"Banks picked up following Mr Cryan's comments – that helped sentiment," Patrick Spencer, London-based vice chairman of equities at Robert W Baird, told Bloomberg.

"As banking worries are slowly getting behind us, the risk-on sentiment will be back."

(BusinessDesk)