US Stocks and Energy Indexes Rise as Oil Declines and US Cuban Relationship Improves

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The Standard & Poor’s 500 index (SPX) dropped to its lowest since October 22 followed by a strong surge in US stocks. During the shift, energy shares jumped to their highest in three years. Fed policy sparked a surge in sentiment that conditions will stay favorable for the economy.

Oil’s plummet to a five-year low caused a massive sell-off of energy shares. Contributing to the S&P’s downward spiral were investor’s global growth concerns. China showed weak export growth, while Japan’s economy shrank more than expected during the third quarter.

Diamond Offshore Drilling (DO: US) and Apache Corporation (APA: US) jumped more than 5.3 percent. Their move puts them at the top of the energy sector pack. Exxon Mobile Corporation (XOM) and Chevron Corporation (CVX) rose nearly 2.6 percent.

Fed Chair Janet Yellen announced that the Federal Open Market Committee will continue its current policy for the next couple of meetings. This would stymie any changes until late April. She added that, based on economic conditions at that time, interest rate hikes are eminent in 2015.

In the shadow of crude oil’s 50 percent slump over the last six months, West Texas Intermediate crude (CL) recently climbed 3.6 percent. These moves have left the Organization of Petroleum Exporting Countries (OPEC) fighting to regain market share. In the meantime, US shale oil growth continues to contribute to worldwide oil excesses.

In other financial news, President Barack Obama announced that the United States will ease the trade restrictions set in place by the more than 50-year-old Cuban embargo policy. Despite opposition to these concessions, policy changes will allow minimal trade and tourism activities to begin with America’s long-time foe. The exchange of several high-profile prisoners facilitated the reopening of diplomatic relations.

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