U.S. stocks closed broadly higher on Tuesday, as crude futures bounced from multi-year lows in a brief respite from a cascading downward spiral that has sent oil price plunging in recent weeks.
U.S. crude futures rallied by nearly 1% in Tuesday’s session to close above $36 a barrel, rebounding from six year lows in the previous trading day. Investors continued to react to last week’s repeal of a 40-year ban on U.S. crude exports that has erased the premium on brent crude against its American counterpart.
At Tuesday’s close of trading, the price of WTI crude settled two cents higher than the international benchmark, marking the first time U.S. crude futures have closed above brent since August, 2010. Dragged down by a massive glut of oversupply on global markets, dwindling crude prices have contributed to a 25% decline in major energy stocks this year.
The Dow Jones Industrial Average surged 165.65 or 0.96% to 17,417.27, while the NASDAQ Composite index added 32.19 or 0.65% to 5,001.11, extending gains from Monday’s session. The S&P 500 Composite index, meanwhile, gained 17.82 or 0.88% to 2,038.97, as all 10 sectors closed in the green. Stocks in the Basic Materials, Industrials and Energy industries led, each gaining more than 1%. Basic Materials stocks have slumped by more than 10% on the year.
Volatility remained high as the Dow posted its eighth consecutive 100 point move and 14th in the last 16 sessions. The major indices are on pace for their most volatile month of December in recent memory.