OPEC production agreement sends energy stocks soaring.
U.S. stocks advanced Friday after OPEC reached a new deal to boost crude production, sending energy shares soaring.
The large-cap S&P 500 Index (NYSEARCA:SPY) gained 0.2% to closeat 2,754.89. Eight of 11 primary sectors reported gains, led by a more than 2% surge in energy shares.
Dow industrials (NYSEARCA:DIA) jumped 119.26 points, or 0.5%, to 24,580.96.
Meanwhile, the Nasdaq Composite Index (NYSEARCA:QQQ) bucked the general uptrend as technology shares faltered. The technology-heavy index declined 0.3% to finish at 7,692.82.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) declined sharply on Friday following double-digit gains the previous session. The so-called “fear index” declined 6.7% to 13.66.
The Organization of the Petroleum Exporting Countries (OPEC) concluded its biannual meeting in Vienna Friday by announcing a 600,000 barrel-per-day increase in crude output. The deal is expected to put a cap on rising oil prices following a yearlong recovery that was driven by cartel policy to diminish excess supplies from the market.
U.S. West Texas Intermediate (WTI) futures surged $3.19, or 4.8%, to $68.73 a barrel on the New York Mercantile Exchange. Brent crude, the international futures benchmark, added $1.96, or 2.7%, to $75.01 a barrel.
In data news, the U.S. economy expanded at a steady rate in June, a sign that the domestic recovery was improving. The IHS Markit flash Composite purchasing managers’ index (PMI) slipped to 56.0 in June from 56.6 in May on a scale where 50 separates expansion and contraction.
The Final Word: OPEC’s consensus should keep oil prices from exploding higher in the short term as major producers seek to maintain their competitiveness. U.S. President Donald Trump has blamed the cartel for the recent surge in oil values, which culminated last month as prices crossed three-and-a-half-year highs.