Energy, materials lead Wall Street gains as oil jumps

Has Oil Finally Hit a Medium-Term Bottom?
Has Oil Finally Hit a Medium-Term Bottom?

Wall Street was higher on Monday as prices of crude oil and other commodities surged, pointing to an uptick in investors' risk appetite following a rout in global markets.

Crude prices were up more than 5 percent after data showed a fall in U.S. rig counts and the International Energy Agency said it expects U.S. shale oil output to fall.

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Prices of industrial metals such as Copper and Zinc were also up as investors worried about potential shortages.

Still, oil prices are hovering near levels last seen in 2003, with investors weighing the impact of a potential wave of defaults from energy companies on the financial sector.

Chevron's (CVX.N) 1.4 percent rise provided the biggest boost to the energy sector .SPNY.

The S&P financial sector .SPSY, which has been the worst performer among the 10 major sectors this year, was up 1.79 percent on Monday as bank stocks recovered slightly.

"You've seen oil rebound today, which people are viewing very much as a kind of a green flag in the short-term to take on risk again to a certain degree," said James Abate, chief investment office of Centre Funds in New York.

Photos from the floor of the New York Stock Exchange on Feb. 22:

Abate, however, cautioned Monday's gains should not be seen as the start of a long-term recovery.

"To me, this continues to be a counter-trend rally in the context of an intermediate to longer-term decline in the stock market. Our view is that this is nowhere near the resumption of a bull market," he said.

At 9:37 a.m. ET (1437 GMT), the Dow Jones industrial average .DJI was up 179.29 points, or 1.09 percent, at 16,571.28, the S&P 500 .SPX was up 22.75 points, or 1.19 percent, at 1,940.53 and the Nasdaq Composite index .IXIC was up 52.02 points, or 1.15 percent, at 4,556.45.

All 10 major S&P sectors were higher, led by a 2 percent rise in both energy .SPNY and materials .SPLRCM sectors.

Investors are also keeping a close eye on the U.S. Federal Reserve for its next move on interest rates.

While Fed Chair Janet Yellen has indicated the central bank would stick to its rate hike program, policymakers appear at odds and traders have all but given up on a hike this year.

Shares of Fitbit (FIT.N) were up 4 percent at $16.24 ahead of its results later in the day.

Lumber Liquidators (LL.N) was down 20.8 percent at $11.26 after a report showed people exposed to some types of the company's laminate flooring were more likely to get cancer than previously estimated.

Advancing issues outnumbered decliners on the NYSE by 2,487 to 279. On the Nasdaq, 1,906 issues rose and 375 fell.

The S&P 500 index showed 13 new 52-week highs and no new lows, while the Nasdaq recorded 24 new highs and nine lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)

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