Stock Futures Climb on Hopes for OPEC Freeze
New York (Apr 6) Stock futures edged higher on Wednesday, recovering from a selloff a day earlier, as crude oil spiked on hopes of a production freeze among major oil-producing countries.
S&P 500 futures were up 0.18%, Dow Jones Industrial Average futures climbed 0.15%, and Nasdaq futures added 0.21%.
Crude oil rallied on Wednesday after Kuwaiti governor for the Organization of Petroleum Exporting Countries, Nawal Al-Fuzaia, said a deal could be reached when members meet in Qatar on April 17. Hopes over a possible deal among members have faded recently as Iran suggested it would not participate in a deal until it has reached pre-sanction production levels.
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Oil was also higher after the latest weekly read from the American Petroleum Institute showed that U.S. inventories fell by 4.3 million barrels in the past week. Analysts had expected an increase of 2.9 million barrels. An official read from the Energy Information Administration will be released mid-morning Wednesday. West Texas Intermediate crude was up 3% to $36.98 a barrel.
Concerns over the global economy that battered Wall Street at the start of 2016 took their toll again on Tuesday. The S&P 500 fell 1% in its second straight day of declines, following European markets sharply lower after Germany, the region's largest economy, showed an unexpected contraction in manufacturing.
Pfizer (PFE - Get Report) and Allergan (AGN - Get Report) were active in premarket trading after confirming they would terminate their $160 billion merger after the U.S. Treasury introduced new rules targeting inversion deals. The U.S. Treasury's changes would make it more difficult for U.S. corporations to merge with foreign rivals to reduce their domestic tax rates. Pfizer agreed to pay a $150 million breakup fee to Allergan for for reimbursement of expenses associated with the transaction.
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"That deal, I think, is absolutely dead," Cramer said Tuesday, noting that he has been waiting for Allergan shares to come down.
Cramer said he thinks Allergan is a "screaming buy" below $220. The stock closed at $236.55 on Tuesday.
Halliburton (HAL - Get Report) was slightly higher despite reports the U.S. Justice Department could level a lawsuit against it to prevent it from acquiring Baker Hughes BHI. The proposed $35 billion deal would combine the second- and third-largest oil-services companies, sparking antitrust concerns.
Constellation Brands (STZ - Get Report) was slightly higher after topping analysts' estimates on its top- and bottom-line. The wine, beer and spirits company earned $1.19 a share in its fourth quarter, a nickel above estimates, while sales jumped 14% to $1.54 billion. Constellation also raised its quarterly dividend 29% to 40 cents a share. The company also said it is evaluating the potential for a public float of part of its Canadian business.
Source: TheStreet
