U.S. equities surged higher on Wednesday thanks to reports OPEC officials had reached a real to cut output somewhere between 200k and 700k barrels per day from the 33.2 million pumped in August.
The Dow Jones Industrial Average gained 0.6%, the S&P 500 gained 0.5%, the Nasdaq Composite gained 0.2%, and the Russell 2000 gained 0.8%.
Although an actual execution of the agreement — and a hammering out of all necessary details — isn’t expected until the official meeting in November, this was seen as a huge step towards bringing the oversupplied global energy market back into balance. And since an OPEC output freeze has been teased, in one form or another, since February there was a collective sigh of relief.
As a result, crude surged 5.3% for its best one-day gain since April.
No surprise that energy stocks led the way higher, up 4.3%. Additionally, BlackBerry Ltd (NASDAQ:BBRY) gained 5.7% after reporting good Q2 earnings. Nike Inc (NYSE:NKE) fell 3.8% on weaker margins and weak guidance. Twitter Inc (NYSE:TWTR) fell 3.2% as skepticism grows surrounding M&A speculation.
Total exchange volume on the NYSE was 910 million shares, 99.8% of the 30-day average. Breadth was positive, with advancers outpacing decliners 3.1 to 1. Nasdaq breadth was less positive, at 1.4 to 1. For the month, the S&P 500 is posting a fractional gain but is up 3.5% for the quarter to date and 6.2% for the year to date.
Technically, the S&P 500 jumped back over its 50-day moving average but remains within the confines of a three-month consolidation range with resistance near 2,180. The Dow Jones Industrial Average is testing its July breakout from the three-year trading range which featured long-running resistance near 18,000.
The situation looks vulnerable as breadth has rolled over since early September and has yet to recover, with the percentage of S&P 500 stocks in uptrends stuck near 70% vs. the high of 80% seen earlier this year.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
Today’s Trading Landscape
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