NEW YORK (AP) — U.S. stocks were solidly higher in afternoon trading Tuesday, as investors worked through the initial batch of earnings from the first quarter of the year. News reports that Saudi Arabia and Russia had agreed on production cuts helped boost crude oil prices, which in turn helped lift energy companies.
KEEPING SCORE: The Dow Jones industrial average added 149 points, or 0.9 percent, to 17,706 as of 1:50 p.m. Eastern. The Standard & Poor’s 500 index was up 16 points, or 0.8 percent, to 2,058 and the Nasdaq composite rose 24 points, or 0.5 percent, to 4,858.
EARNINGS: Earnings season got underway on a weak note late Monday as Alcoa reported a 15 percent decline in revenue. Alcoa also had a huge drop in first-quarter profit as aluminum prices fell. Alcoa’s stock fell 36 cents, or 4 percent, to $9.38.
Later this week big U.S. banks will start releasing results, including JPMorgan Chase, Citigroup and Wells Fargo. Investors are going to be watching the banks, sometimes seen as a proxy for how well the U.S. economy is doing, to see how the nation’s major financial institutions have weather the volatility and low oil prices earlier this year.
“It’s not going to be a clean earnings season for financials at all. The banks have suffered from fears about oil loans, but those fears are overblown,” said Peter Stournaras, a portfolio manager at BlackRock.
Expectations for earnings are low this quarter. Analysts surveyed by FactSet expect corporate profits to be down 9.1 percent from a year ago, hurt primarily by the steep drop in oil prices and other commodities. The entire energy sector is expected to report a loss this quarter, according to FactSet.
“Earnings will paint an important picture over the next few weeks, but the more important story is the continued improvement in the macroeconomic environment here in the U.S. and globally,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.
OIL IN FOCUS TOO: Oil prices moved sharply higher after Russian officials told Interfax, the Russian news agency, that they planned to reach a deal with Saudi Arabia to cut oil production. OPEC ministers meet this Sunday in Doha, Qatar.
Benchmark U.S. crude oil was up $1.59, or 4 percent, at $41.97 a barrel in New York. Brent crude, the international standard, rose $1.70 to $44.52 a barrel in London.
Energy stocks, which have been beaten down in recent months, followed the price of crude oil higher. The energy component of the S&P 500 jumped almost 3 percent.
BONDS AND CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.78 percent from 1.73 percent late Monday. The euro fell to $1.1381 from $1.1412 while the dollar rose to 108.64 yen from 107.94 yen.
METALS: Precious and industrial metals prices closed broadly higher. Gold gained $2.90 to $1,260.90 an ounce, silver rose 25 cents to $16.22 an ounce and copper climbed six cents to $2.15 a pound.