Wall St headed for strong open as higher oil drives energy stocks

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Reuters-Meh-dha Sing-Shashank Nayar

The front facade of the New York Stock Exchange (NYSE) is seen in New York City, U.S., May 4, 2021. REUTERS/Brendan McDermid/File Photo

Wall Street’s main indexes were on pace to open higher on Monday as higher oil prices lifted energy stocks, while investors geared up for key inflation readings later this week.

Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N) and Schlumberger (SLB.N) rose between 0.7% and 1.1% in premarket trading as oil prices firmed more than $1 a barrel.

Risk sentiment also improved with cryptocurrencies clawing back ground after a bout of weekend selling fueled by further signs of a gathering Chinese crackdown on the emerging sector.

Crypto-exchange operator Coinbase Global (COIN.O)and miners Riot Blockchain (RIOT.O) and Marathon Digital Holdings (MARA.O) gained between 3% and 4%. read more

Equity markets have been rocked in recent weeks as investors juggled between strong economic data and fears that supply side constraints could prompt a prolonged period of higher prices and force the Federal Reserve to pare back its crisis era support.

“We are looking at a good positive start to the week as equity valuations are back to a reasonable level and are easily justified which is helping remove a good chunk of speculative trade,” said Art Hogan, chief market strategist at National Securities in New York.

“We went through a period of time when we were out of tech and into value stocks, while right now we see a lot of those trades come back into tech.”

After falling as much as 4.3% from its May 7 record high, the S&P 500 is now only 2% off that level as investors picked up technology stocks that were beaten down the most on rate hike fears.

The U.S. personal consumption data on Thursday, the Fed’s preferred inflation measure, will be the centerpiece of the week.

At 8:31 a.m. ET, Dow e-minis were up 122 points, or 0.36%, S&P 500 e-minis were up 22.25 points, or 0.54%, and Nasdaq 100 e-minis were up 106.75 points, or 0.8%.

Cabot Oil & Gas Corp (COG.N) and Cimarex Energy Co (XEC.N) agreed to merge to form a U.S. oil and gas producer with an enterprise value of about $17 billion, the latest deal in a sector rebounding from one of its worst downturns. read more

Shares of Cabot and Cimarex fell 1.2% and 1.7%.

Construction materials supplier Martin Marietta Materials Inc (MLM.N) said it would buy HeidelbergCement AG’s (HEIG.DE) assets in California and Arizona for $2.3 billion. Martin Marietta’s shares rose 1.5%. read more

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