US stocks inch higher on hope for more oil deals

NEW YORK (AP) - Energy companies led U.S. stocks higher Tuesday as investors hoped higher oil prices and bigger profits are on the way.

News of two deals in the energy sector also helped send those stocks higher as traders anticipated that more consolidation could follow. Spectra Energy agreed to be acquired for $28 billion and Yates Petroleum said it would be bought for $2.3 billion.

"What's driving the stocks today is a view that some consolidation might take some costs out and drive up profits," said Jim McDonald, chief investment strategist for Northern Trust.

The Dow Jones industrial average gained 46.16 points, or 0.2 percent, to 18,538.12. The Standard & Poor's 500 index rose 6.50 points, or 0.3 percent, to 2,186.48. The Nasdaq composite added 26.01 points, or 0.5 percent, to close at 5,275.91, an all-time high.

Investors were once again getting their hopes up for an agreement among oil producing countries to reduce output and mitigate a supply glut that has knocked oil prices lower.

On Tuesday Iran's oil minister said his country would support an effort by OPEC to stabilize the oil market. Because Iran is boosting its oil production after years of sanctions, it has opposed efforts to limit oil production.

Oil prices didn't change much on the day. Benchmark U.S. crude oil added 39 cents to $44.83 a barrel in New York. 

Brent crude, the benchmark for international oil prices, lost 37 cents to $47.26 a barrel in London.