Oil prices rebound after plunge, energy stocks rise; US stock gain

U.S. stocks were higher on Wednesday, after consumer prices in October rose as expected, adding little pressure on the Federal Reserve to raise interest rates swiftly, while a rebound in oil prices lifted energy stocks.

Shares of Exxon Mobil Corp rose 0.5 per cent and Chevron Corp gained 1.6 per cent as oil prices recovered on growing prospect of an output cut by OPEC and allied producers, after a 7 per cent plunge in the previous session.

The S&P energy index jumped 1.5 per cent and led a broad rally among the major S&P sectors, with only defensive utilities falling.

The Labor Department said U.S. consumer prices rose 0.3 per cent last month, after edging up 0.1 per cent in September, amid a rise in gasoline costs and rents.

Excluding volatile food and energy components, prices climbed 0.2 per cent. Both numbers came in line with expectations, tempering worries about an overheating U.S. economy that could push the Fed to raise rates aggressively.

With a December move almost fully priced in, investors are looking for hints on how many times the central bank would raise rates in 2019.

A bitter trade dispute between the United States and China, worries about rising interest rates and slowing corporate profits have stalled gains for U.S. stocks, with the S&P 500 trading about 7 per cent below its record level.

"It wouldn't take the much good news, whether it is stabilization in energy prices, benign CPI and good news on Brexit, any combination of those will propel us higher," said Art Hogan, chief market strategist at B. Riley FBR in New York.

Trade tensions took a step back on Tuesday after U.S. economic adviser Larry Kudlow said Washington welcomed the resumption of talks with China on trade.

At 9:58 a.m. ET the Dow Jones Industrial Average was up 139.29 points, or 0.55 per cent, at 25,425.78, the S&P 500 was up 16.90 points, or 0.62 per cent, at 2,739.08 and the Nasdaq Composite was up 44.77 points, or 0.62 per cent, at 7,245.65.

PG&E Corp slumped 13.1 per cent, leading decliners on the S&P 500 after the utility warned of liquidity concerns if its equipment was found responsible for starting the Camp wildfire currently raging in California.

Snap Inc fell 2 per cent after Reuters reported that U.S. regulators have subpoenaed the social media app maker for information about its March 2017 initial public offering.

Advancing issues outnumbered decliners for a 3.42-to-1 ratio on the NYSE and a 2.20-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and two new lows, while the Nasdaq recorded eight new highs and 51 new lows.

(With inputs from agencies.)