Oil price drop and BofA forecast lift Wall Street

AN upbeat profit forecast from Bank of America and a pullback in oil prices lifted Wall Street out of the technical danger zone yesterday in another sign of the market’s near-term resilience.

The S&P 500 jumped back above a six-month trend line after closing just below it on Monday. Holding this level is a sign of strength, but traders will grow wary the more it is tested.

Similarly, the Nasdaq composite index rallied from its 50-day moving average in another indication of an uptrend, although trading volume was lacklustre.

Bank of America shot up 4.7 per cent to $14.69 after it forecast pre-tax profit of about $40bn annually longer term, higher than some investors had expected.

Financial shares led gainers, with the S&P financial index up 2.2 per cent.

Oil prices pulled back, with Brent crude down nearly 2 per cent at $113.06 a barrel after Kuwait’s oil minister said OPEC was in discussions to increase production.

The Dow Jones industrial average gained 124.58 points, or 1.03 per cent, to 12,214.61. The Standard & Poor’s 500 Index added 11.69 points, or 0.89 per cent, to 1,321.82. The Nasdaq Composite Index rose 20.14 points, or 0.73 per cent, to 2,765.77.