US stocks rally as oil extends gains

A monthslong slump in oil, uncertainty about the magnitude of an economic slowdown in China and concerns about whether that spills over and restrains USA growth have plagued stocks since the start of the year.

Stock markets around the globe posted their first weekly gains in a month as the price of oil climbed back above $32 a barrel.

The Dow Jones Industrial Average added 216 points, or 1.3%, to 16,0964. The Nasdaq Composite (COMP – 4,591.18) was the biggest victor, posting a gain of 119.1 points, or 2.7% today, and 2.3% for the full week.

The S&P 500 closed 2 percent higher, above the psychologically key 1,900 level, with energy gaining 4.3 percent to lead all sectors higher.

The stock rally was jumpstarted Thursday when the European Central Bank strongly hinted that more stimulus would be forthcoming at its March meeting. The S&P 500 has also lost more than 10 percent of its value over the same period, while Nasdaq Composite lost 13 percent. While low oil prices should be a boon to net oil importers, recent losses have raised fears about energy companies and the banks that have lent heavily to them, as well as the outlook for global inflation. The Nasdaq lost 150 points, or 3.4 percent, to 4,325.

Bond prices rose as investors shifted money out of stocks. (GE) is due to report earnings ahead of the market’s open on Friday.

Analysts were expressing some hopes that Wall Street could hang onto the positive momentum, at the end of a week that has seen major US markets push below August lows. The dollar was up 0.8% against the yen at Yen118.76. “What a difference a day makes!” said Stephen Wood, Chief Market Strategist at Russell Investment Group in NY.

The Dow is down 1,658.29 points, or 9.5 percent.