U.S. stocks traded more than 1 percent higher Monday, trying to build on their best weekly gain of 2016, as oil prices climbed.
The Dow Jones industrial average added 200 points in morning trade to come within 10 percent of its 52-week intraday high, out of correction territory on an intraday basis. Goldman Sachs and UnitedHealth contributed the most to gains.
The S&P 500 also traded within 10 percent of its 52-week intraday high, or out of correction, with materials, energy and financials leading gains.
WTI futures for March delivery, which expire after the settle Monday, gained more than 6 percent in morning trade after the International Energy Agency said in its medium-term outlook Monday that U.S. shale oil production was expected to fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017.
The forecast added to last week’s drop in U.S. oil rig count to their lowest level since December 2009, according to Reuters.
“Perhaps today’s report would offer investors a little more comfort that the worst is behind us,” said Jack Ablin, chief investment officer at BMO Private Bank.
“Certainly the U.S. is the swing producer and seeing the rig count fall certainly leads to this belief that production would fall,” he said.
OPEC General Secretary Abdalla Salem El-Badri is scheduled to speak at the CERAWeek energy conference in Houston later on Monday.
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Copper and other industrial metals also climbed, helping shares of Freeport-McMoRan rise in pre-market trade.
“I think what’s more encouraging is if you see the commodity complex surging that would be driven by a better impression of the global economy,” said Art Hogan, chief market strategist at Wunderlich Securities.
Globally stocks gained, with European stocks more than 1.5 percent higher in morning trade ET and the Shanghai composite jumping more than 2 percent to lead gains in Asian equities.
“Any time we get a stable night in China, (that) leads to calmness in Europe, and calmness in those two markets helps here,” said Peter Boockvar, chief market analyst at The Lindsey Group.
On Friday, the major U.S. averages ended the week up 2.5 percent or more, with the Dow Jones industrial average and S&P 500 posting their best week since the one ending Nov. 20. The Nasdaq composite outperformed, up nearly 4 percent for the week, its best since the one ending July 17.
In morning trade, the Dow Jones industrial average traded up 186 points, or 1.14 percent, to 16,580.
The S&P 500 gained 23 points, or 1.23 percent, to 1,941.
The Nasdaq composite rose 54 points, or 1.21 percent, to 4,559.
About eight stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 85 million and a composite volume of 266 million.
—Reuters contributed to this report.