Rally pushes Dow past 18,000 mark

An oil crew works on pump in Bahrain. Oil-producing countries failed to hammer out a deal to cut output over the weekend, sending the price of U.S. oil down Monday. Stocks followed but recouped all of their losses.

Energy companies led a broad rally in U.S. stocks Monday as investors shrugged off another slide in crude oil prices.

The gain nudged the Dow Jones industrial average slightly above the 18,000 mark for the first time since last summer, while the S&P 500 index rose to the highest level in a year.

The market had been headed lower early on following news that representatives from several major oil-producing nations meeting over the weekend in Doha, Qatar, failed to hammer out a deal to cut output. That sent the price of U.S. oil down 7 percent at one point before recouping much of its losses. It ended down 1.4 percent.

Beyond the volatile oil market, investors had their eye on the latest company earnings, which have been mostly encouraging so far, said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute.

“We’re seeing broad-based gains across all the sectors,” Lynch said. “The market is maybe finding some resilience here and maybe looking back on the fundamentals of the earnings season and seeing it’s not so bad.”

The Dow climbed 106.70 to close at 18,004.16 Monday. The last time the average was above 18,000 was on July 20.

The S&P 500 added 13.61 to 2,094.34. That’s the highest level since April 14 last year. The Nasdaq composite index gained 21.80 to 4,960.02.

The price of oil had risen in recent weeks on hopes for a deal that will limit oil production in an effort to relieve a global glut. But hopes for a meaningful production cut faded Monday when the talks over the weekend failed to deliver a deal.

Saudi Arabia said it wouldn’t back a deal if Iran, which is trying to ramp up output as international sanctions are lifted, wasn’t involved. Already-tense relations between the two countries deteriorated in recent months over issues including the wars in Syria and Yemen, in which they are backing opposing sides.

Word of the failed talks initially pulled oil prices lower, weighing on stocks.

U.S. crude fell 58 cents, or 1.4 percent, to close at $39.78 a barrel in New York. Brent crude, the international benchmark, lost 19 cents, or 0.4 percent, to close at $42.91 a barrel in London.

Investors decided that expectations for an oil output deal had been very modest to begin with, said Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management.

“The Saudis, back in January, had continued to point to June as being the OPEC meeting that they were really focused on,” Wiegand said. “Perhaps the expectations for something before June were misplaced.”

Several energy and drilling-services companies rebounded after an early morning sell-off.

Energy companies notched the biggest gain among the sectors in the S&P 500, rising 1.6 percent. The sector is up 7.7 percent this year.