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US shares dragged higher by buoyant oil

Last updated: 09:08 03 Mar 2016 AEDT, First published: 21:19 02 Mar 2016 AEDT

Oil-storage

US shares staged gains into the close on Wednesday after oil prices found traction to rally.

A few hours earlier, the main line tickers were just south or just north of unchanged on the day. But the Dow Jones Industrial Average managed to close 0.20% higher at 16,899, the broader S&P500 index up 0.4% at 1,986, and the tech-heavy Nasdaq Composite which earlier nursed losses, returned to health with a 0.3% advance to 4,703.

The US oil benchmark West Texas Intermediate extended light gains to be up 1.2% at $34.80 a barrel.

There was oil-related news which dominated the S&P risers board, with Chesapeake Energy (NYSE:CHK) the top gainer, of 23% to $3.40. The company said on Tuesday it did not expect to face criminal prosecution or fines related to former chief executive officer Aubrey McClendon's antitrust charges. McClendon was indicted by a federal court on Tuesday but was found dead at the scene of a car crash in Oklahoma City early on Wednesday.

Another energy stock delivering a huge rise was  Ultra Petroleum (NYSE:UPL), whose shares doubled after the company announced a two-month forbearance agreement with all of its lenders. The independent oil and gas company laden with $3.75bn in debt which only yesterday faced the prospect of Chapter 11 bankruptcy by March 15 stepped away from the brink.

Ultra Petroleum shares closed up 102% at $0.73, its highest level in three weeks.


Midsession

Wall Street shares were rangebound midsession on Wednesday, supported by forecast-beating private payrolls data but anchored by listless oil prices.

The Dow Jones INdustrual Average was flat at 16,858, as was the S&P500 index at 1,978. The tech-heavy Nasdaq Composite was down 0.2% at 4,682 and slightly underperforming the others.

Helping drag the Nasdaq lower was Amazon (NASDAQ:AMZN) down 0.4% at $576.75. The online retailer said it is recalling some Kindle Fire power adapters over fears they could pose an electric shock risk. Devices sold after September 2015 may have chargers that are at risk of breaking and exposing users to electric shocks.

Oil prices, although higher were not notching up the kinds of gains seen earlier in the week. The US benchmark West Texas Intermediate was up 0.6% at $34.60.

US jobs data from ADP, often viewed as an early indicator of the wider US non-farm payrolls due on Friday, recorded 214,000 job creation in February, well above estimates of 185,000.


Open

Stocks opened cautiously after yesterday's sparkling gains, with the declining oil price weighing on sentiment.

The S&P 500 kicked off down half a point at 1,978 while the Dow Jones average gave up 14 points at 16,851. the tech-heavy Nasdaq Composite, however, edged up a point to 4,691.

Payrolls processing firm ADP released its payrolls data for February, which is often regarded as a pointer towards the official non-farm payrolls release on Friday, revealing that the private sector added 214,000 jobs in February, which was up on January's revised gain of 193,000 and ahead of predictions of a 185,000 increase.

On the Nasdaq, Industrial Services of America (NASDAQ:IDSA) was an early front-runner, rising 14.2% to 1.941, after the scrap metal trader inked a new revolving credit line of $6mln.

On the NYSE, Canada's CCL systems sent shares in Checkpoint Systems (NYSE:CKP) soaring 28% to $10.10 after it made an agreed bid for the anti-theft tag maker worth $10.15 a share.

Controversial seeds distributor Monsanto (NYSE:MON) wilted after it cut its earnings forecast for 2016. The shares fell 5.4% as the agribusiness lowered earnings per share guidance to a range spanning from $4.40 to $5.10 from its previous range of $5.10 to $5.60.


Stocks are set to give back a small proportion of yesterday's handsome gains, ahead of the release of the jobs data from payrolls processing firm ADP.

The Dow Jones average is expected to shed 20 points after closing up 349 points at 16,865 on Monday. The broader-based S&P 500 index, which closed at 1,978, is on course to open a point lower.

The ADP jobs figure is expected to indicate payrolls swelled by 185,000 in February, after rising 205,000 the previous month.

Investors will be digesting the results from the “Super Tuesday” presidential primaries, which largely cemented the positions of the front-runners.

Before trading starts, updates are expected from booze firm Brown-Forman (NYSE:BFA) and preppie clothier Abercrombie & Fitch (NYSE:ANF).

Shares in railroad services company CSX (NYSE:CSX) were rising in pre-market trading on reports Canadian Pacific (NYSE:CP, TSE:CP), the railroads company, is mulling a bid.

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