U.S. Stock Markets Rally on ECB Measures, Higher Oil Prices

Stock Markets

The stock markets in the United States climbed on Friday due to higher oil prices and the new stimulus measures by the European Central Bank (ECB), which were viewed positive by investors.

The WTI crude oil and the Brent crude oil increased 1.88% to $38.55 per barrel and 0.95% to $40.43 per barrel, respectively today.

The International Energy Agency (IEA) stated that oil prices may have reached the bottom since the output in the United States and other non-OPEC countries started a faster decline.

ECB stimulus add momentum to the stock markets

The Governing Council of the ECB reduced the interest rate on cash parked overnight by banks to 0.4% and its benchmark rate to zero. It also increased its bond purchases to €80 billion per month, which now includes corporate bonds.  The ECB will also start its new round or targeted refinancing operations in June.

Joe Quinlan, chief strategist at U.S. Trust, Bank of America Private Wealth Management, told Bloomberg, “Any aggressive moves to stimulate growth to keep expansion on track are positive. He added that the global recessionary fears declined.

“What the ECB did yesterday helped that momentum. What’s key for U.S. investors is the euro-dollar rate, and that’s back up which is good news for U.S. earnings and for affiliates of multinationals,” according to Quinlan.

The Dow Jones Industrial Average climbed 218.18 points or 1.28% to 17,213.31 points, and the S&P 500 increased 32.62 points or 1.64% to 2,022.19 points.

The NASDAQ went up 83.31 points or 1.85% to 4,748.47 points and the Russell 2000 roses 23.84 points or 2.24% to 1,087.83 points.

PSW Investments chief executive Phil Davis noted, “There’s an incredible rebound because the chatter on easing became extremely positive after the market closed yesterday and all the global markets are rallying on that.”

Patrick Spencer, vice chairman of equities at Robert W. Baird & Co. in London, said, “The market is now looking forward to the Fed decision next week, so it’s going to be pretty quiet. The market will continue to recover today in the U.S. This is the most hated bull market ever, but it’s all bubbling up back again.”

Market movers

Anadarko Petroleum Corporation (NYSE: APC) gained 8.94% to $46.30 per share. The third-largest natural gas producer in the United States decided to reduce its global workforce by 17% or 1,000 jobs to be able to survive the commodity crisis. The price of natural gas dropped nearly 70% from its peak in February 2014.

The stock price of CF Industries Holdings (NYSE: CF) increased almost 6% to $34.64. The company is the biggest gainer among the companies in the raw materials sector today,

The shares of Symantec Corporation (NASDAQ:SYMC) climbed almost 4% to $18.39 per share. Analysts at RBC Capital Markets upgraded their rating on the stock to Outperform and maintained their price target of $23 per share.

The stock price of Ulta Salon Cosmetics & Fragrance (NASDAQ: ULTA) surged more than 17% to $191.62 per share after reporting quarterly sales that exceeded the expectations of analysts.