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US stocks open higher as oil prices jump 3%

CNBC logo CNBC 15/05/2017 Fred Imbert

U.S. equities kicked off Monday's session trading slightly higher after comments from the Russian and Saudi energy ministers sent oil prices surging.

The Dow Jones industrial average rose about 50 points shortly after the open, with Johnson & Johnson contributing the most gains. The S&P 500 climbed 0.2 percent, with energy advancing more than 1 percent to lead advancers. The Nasdaq composite gained 0.1 percent.

West Texas Intermediate futures spiked 3.64 percent to $49.58 per barrel after Russia's Alexander Novak and Saudi Arabia's Khalid al-Falih said the two countries agreed to extend a production cut until March 2018.

That said, an increase production from the U.S. could cap energy's gains, said Jason Pride, director of the investment strategy at Glenmede. "Our Take: Oil should trade in the $50-70 range as increased demand is met by supply from U.S. share oil producers," Pride said in a note Monday.

The comments from al-Falih and Novak helped the Energy Select Sector SPDR Fund (XLE), which tracks the S&P energy sector, climb about 1.7 percent in the premarket.

Energy helped lift the broader U.S. stock indexes as investors shrugged off news of a massive global cyber attack and a missile test from North Korea.

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"Everything seems to slide off this market," said Bruce McCain, chief investment strategist at Key Private Bank. "Other than a potentially cataclysmic event in Washington, ... I think the slowdown in economic data" could threaten the market in the next 3-to-6 months. "In the meantime, the market continues to hold up with its Teflon curtain."

On Friday, a "ransomware" virus dubbed WannaCry hit 200,000 in more than 100 countries. The virus locked up computers in car factories, hospitals and schools.

President Donald Trump ordered Homeland Security Adviser Tom Bossert to hold an emergency meeting Friday night to assess the threat posed by the attack, Reuters reported.

Meanwhile, North Korea said it tested a new type of missile that can carry a nuclear warhead. However, the U.S. military's Pacific Command said on Sunday the type of missile that was fired was "not consistent" with an ICBM and South Korea's military played down the North's claim of technical progress on atmospheric re-entry.

—Reuters contributed to this report.

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