US stocks went north riding piggyback on energy companies as investors hoped for steeper oil prices. They believe that better profits will be earned within a space of a few months. The stocks rose as news related to two deals in energy sector percolated down to the investors. The two deals were yates Petroleum and Spectra Energy. The former would be acquired for $2.3 billion and the latter for $28 billion. There were anticipation among traders that there could be increased consolidation in the coming days.
State of stocks
The sentiment has been echoed by many big investors like Northern Trust. According to Jim McDonald of the company, the stocks are going up as present due to the assumption that there isa possibility of consolidation. If this happens, the some costs can be trimmed and profits will be driven up.
The DJIA or Dow Jones Industrial Average went up by 46.16 points. The rise was about 0.2 percent to touch 18,538.12. There was a rise of 6.50 points by the S&P 500 index- a total of 0.3 percent to touch 2,186.48. There was also a 26.01 advance of the Nasdaq composite. It went up by 0.5 percent and closed at 5,275.91. This is a record high.
The investors are hoping that an agreement will be inked within the oil producing countries. The output will be reduced and a glut of supply must be mitigated. These two prices have made oil much lower. ON September 6, the oil minister of Iran has suggested that his country woul provide support to the OPEC if it helps in stabilizing the oil market. Since Iran is increasing its production of oil after many years of sanctions, the country has opposed many efforts to restrict the production of oil. Prices of the hydrocarbon remain mostly unchanged during the day. The price of Benchmark US crude went up by 39 cents to touch $44.83 per barrel. The international price benchmark, Brent Crude, in contrast, dropped 37 cents to touch $47.26 per barrel in London.
Service sector slowdown
The morning scene showed the wobbling of the market post a published survey revealed hat there was a drastic slowdown in the American service sector in August. This news sent consumer companies shares and also bank shares much lower. It also sent the prices for bonds, high yielding phone company and utility stocks and precious metals higher.