U.S. stocks ended higher on Monday with those from the energy sector rallying sharply after a surprise production cut announcement by the OPEC+ lifted crude oil prices.
Among the major averages, the Dow ended notably higher after staying firm right through the day’s session. The S&P finished modestly higher after a choppy ride, while the Nasdaq trimmed its losses and settled well off the day’s lows.
The Dow settled with a gain of 327.00 points or 0.98 percent at 33,601.15. The S&P 500 ended up 15.20 points or 0.37 percent at 4,124.51, while the Nasdaq ended lower by 32.45 points or 0.27 percent at 12,189.45.
The Organization of the Petroleum Exporting Countries, and all producing allies announced their decision to reduce output by 1.16 million barrels per day. The group said the production cut would come into effect from May and last until the end of the year, RTTNews reported.
Saudi officials claimed the unexpected cut was a “precautionary measure aimed at supporting the stability of the oil market.”
The sharp jump in oil prices has raised concerns about inflation and the outlook for interest rates.
United Health rallied about 4.7 percent. Chevron climbed 4 percent. Walgreens Boots Alliance, Merck, Visa, Boeing, J&J, Amgen and Honeywell International gained 1 to 2.6 percent.
Shares of Marathon Oil and Halliburton rose sharply, gaining nearly 10 percent and 8 percent, respectively.
On the U.S. economic front, the Institute for Supply Management released a report showing manufacturing activity in the U.S. contracted at a slightly faster rate in the month of March.
The ISM said its manufacturing PMI dipped to 46.3 in March from 47.7 in February, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.5.
With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.5 percent, while China’s Shanghai Composite Index advanced by 0.7 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index drifted down 0.31 percent, the U.K.’s FTSE 100 climbed 0.54 percent, and France’s CAC 40 gained 0.32 percent.
