(Reuters) – U.S. stocks rose on Wednesday, with shares of energy companies getting a boost from surging oil prices after President Donald Trump decided to pull the United States out of a nuclear deal with Iran.
The S&P energy index .SPNY rose 2.2 percent as oil prices hit their highest levels since late 2014 after Trump announced the “highest level” of sanctions against the OPEC member.
The energy index has risen more than 10 percent in the quarter, far outperforming the other major S&P sectors.
“While (energy sector) is providing near-term support for U.S. indexes, I wonder whether it will help in the longer-term, with the decision potentially increasing geopolitical risk,” Craig Erlam, senior market analyst at OANDA in London, wrote in a note.
A Labor Department report on Wednesday showed U.S. producer prices rose less than expected in April, easing fears that inflation pressures were rapidly building up.
The report follows a recent reading on personal consumption expenditure, the Federal Reserve’s favored metric, which hit the 2 percent inflation target.
That had raised the expectations of higher interest rates, pushing the U.S. 10-year Treasury yield US10YT=RR to a two-week high and above the key 3 percent level. [US/]
At 9:52 a.m. EDT the Dow Jones Industrial Average .DJI was up 56.90 points, or 0.23 percent, at 24,417.11, the S&P 500 .SPX was up 9.80 points, or 0.37 percent, at 2,681.72 and the Nasdaq Composite .IXIC was up 19.38 points, or 0.27 percent, at 7,286.29.
The technology sector’s .SPLRCT 0.3 percent rise was the second biggest driver on the S&P 500 index.
Walmart (WMT.N) dropped 3.6 percent after it acquired a controlling stake in Indian e-commerce firm Flipkart for about $16 billion, the U.S. retailer’s biggest foreign investment.
Walt Disney (DIS.N) dipped 2 percent. The media company, which is in the process of buying film and TV assets from Twenty-First Century Fox (FOXA.O), reported quarterly profit that topped Wall Street forecasts.
Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and 7 new lows, while the Nasdaq recorded 89 new highs and 25 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva