U.S. Index Futures Gain Amid Oil Rise, Signaling S&P 500 Advance

By Jonathan Morgan  

U.S. stock-index futures climbed, after equities posted their biggest weekly gain since October, amid recovering oil prices.
Futures on the Standard & Poor’s 500 (SPX) expiring this month added 0.3 percent to 2,072.2 at 6:44 a.m. in New York, after earlier rising as much as 0.4 percent. A rebound in energy shares sent the equity gauge up 3.4 percent last week, closing 0.2 percent from a record. Dow Jones Industrial Average contracts gained 49 points, or 0.3 percent, to 17,810, today. Futures on the Russell 2000 Index added 0.2 percent.
“It seems that the U.S. markets are gaining further from Friday’s close and if oil prices stay the same or move higher we could see a new record high on the S&P,” said Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva. “The S&P and the Russell 2000 are heavily weighted to the energy and materials sectors so that we could get a further rebound if prices of
oil and commodities rally further.”
U.S. equities jumped 5 percent in the past three sessions, as Chair Janet Yellen said the central bank will likely hold key rates near zero at least through the first quarter, even as the U.S. economy strengthens. The gauge erased its loss for the month and closed 5 points below a record of 2,075.37 reached Dec. 5. The S&P 500 has advanced in each of the past six Decembers.
Data today will show existing-home sales in the U.S. slipped to 5.20 million in November from 5.26 million in October, according to economists’ forecasts.

Increased Volatility

Even as stocks rebounded, JPMorgan Chase & Co. and Bank of America Corp. have warned that equity volatility is picking up and upheavals will become more common next year. Three weeks into December, the Chicago Board Options Exchange Volatility Index has already risen 99 percent and fallen 30 percent.
It’s the second time in two months that the gauge of trader anxiety known as the VIX jumped above 20, only to erase more than half its gain within three days. Bouts of volatility are likely to plague investors more in 2015 as the Fed gets closer to raising interest rates, according to strategists from the banks.
Oil climbed for a second day as hedge funds increased bets on rising prices to the highest in four months. Saudi Arabia said it was confident that crude will rebound as world economic growth boosts demand.
Schlumberger Ltd., the world’s biggest provider of oilfield services, added 0.8 percent in German trading. Halliburton Co., the world’s largest fracking company, climbed 1 percent.
Cubist Pharmaceuticals rose 2.1 percent in premarket New York trading. The drugmaker that is being taken over by Merck & Co. said that the U.S. Food and Drug Administration approved its Zerbaxa antibiotic for the treatment of urinary-tract and abdominal infections.