Stocks rise as oil gains again

U.S. stocks advanced as energy shares rallied with oil on speculation crude supplies may not keep up with demand. Ten-year Treasury yields topped 3 percent.

West Texas oil climbed above $71 per barrel after an unexpected drop in U.S. stockpiles and as the market came to terms with President Donald Trump’s decision to withdraw from the Iran nuclear deal. Bank shares rallied as the 10-year yield spiked. Walmart Inc. weighed on the major gauges after its deal to buy a controlling stake in India’s biggest online seller was met with skepticism. A measure of emerging-market currencies erased its 2018 gains.

Stocks extended gains in afternoon trading, with the risk-on tone in markets spreading after North Korea’s good-will gesture of releasing U.S. citizens as captives. Still, markets remained bound in a trading range amid the threat of increased geopolitical tension in the Middle East just as concern spreads over the implications of higher Treasury yields and recent dollar strength. A $25 billion auction of 10-year U.S. notes drew yields of 2.995 percent, just short of carrying a 3 percent coupon for the first time in almost seven years.

“This tug-of-war remains in the market, regardless of the positive headlines on North Korea, regardless of the positive headlines on earnings,” said Quincy Krosby, the chief market strategist at Prudential Financial Inc. “This is a market that has to sort that out, and that 10-year yield flirting with 3 percent again is a reflection of that tug-ofwar.”