Wall Street surged to fresh highs on Thursday as rising oil prices lifted energy stocks and upbeat forecast from No. 2 U.S. carrier Delta Air Lines drove airline stocks higher.
Brent crude rose above $70 a barrel, and U.S. crude rose 1.57 percent to $64.58 per barrel, its highest since December 2014, boosted by a surprise drop in U.S. production and lower crude inventories.
Chevron rose 3.2 percent and Exxon 1.5 percent, helping the S&P energy index gain 2.24 percent and putting it on track for its best percentage gain in more than seven months.
Delta Air Lines rose about 2 percent after reporting upbeat quarterly profit as well as forecast, helped by higher business fares in a busy year-end shopping season.
That helped the Dow Jones U.S. Airlines index up 2.25 percent.
“You see this continued rotation into stocks that will accelerate with the economy,” said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee.
“Energy is in a good space with crude above 64 bucks, and you have industrials being driven by airlines stocks.”
At 12:20 p.m. ET, the Dow Jones Industrial Average was up 119.54 points, or 0.47 percent, at 25,488.67; and the S&P 500 was up 10.06 points, or 0.37 percent, at 2,758.29.
The Nasdaq Composite was up 28.63 points, or 0.4 percent, at 7,182.20.
Wall Street snapped its six days of gains for the first time in 2018 on Wednesday over speculations that China would slow U.S. government bond purchases and a report that U.S. President Donald Trump would end a key trade agreement.
Investor focus returned to quarterly earnings, which will start in full swing on Friday, with the big U.S. lenders JPMorgan and Wells Fargo.
Earnings for S&P 500 companies are expected to increase by 11.8 percent on an average, with the biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.
“Expect some irregularities with respect to earnings in the quarter, but investors are looking beyond the impact of tax and how it hits the bottom line,” said Massud Ghaussy, director at Nasdaq Advisory Services.
Wal-Mart edged up 0.34 percent after the world’s largest retailer decided to raise entry-level wages for hourly employees to $11 an hour in February as a result of corporate tax cuts.
Xerox shares jumped 4.22 percent after the Wall Street Journal reported the copier maker was in deal talks with Japanese camera maker Fujifilm Holdings that could include a change in control of Xerox.
Investors shrugged off data that showed U.S. producer prices fell for the first time in nearly 1-1/2 years in December and weekly jobless claims that fell for the fourth straight week to more than a three-month high.
Advancing issues outnumbered decliners on the NYSE by 2,103 to 762. On the Nasdaq, 2,140 issues rose and 771 fell.