The stock market snapped back for the second straight day, with the S&P 500 closing Wednesday up by more than 1.1%. Fueling that rally was the expected approval by Congress of a $2 trillion stimulus program to help businesses and individuals weather the economic shutdown that has come as the world responds to the COVID-19 pandemic.
Energy stocks were among the biggest movers on the day, with shares of several large, dividend-payers jumping by double-digit percentages. Leading the way were Kinder Morgan , Brookfield Infrastructure Partners , Phillips 66 , Marathon Petroleum , and Occidental Petroleum .
Shares of oil giant Occidental Petroleum rallied almost 12%, not only to the overall bounce in the market but also because of some company-specific news. Occidental announced Wednesday morning that it was cutting its capital spending plan by another $600 million, to 47% less than its initial expectation. While that would cause its production to come in 6% below its prior guidance, it will improve the company’s ability to navigate lower oil prices.
Because it’s cutting spending, Occidental likely won’t need to reduce its dividend again despite a further slide in crude prices. Even after slashing its payout by 86% this month, Occidental still yields 3.6% following Wednesday’s rally. Finally, Occidental also announced an agreement with top shareholder Carl Icahn, who has been battling with the company’s management due to the strategies it adopted in its 2019 purchase of Anadarko Petroleum — an acquisition that left holding a lot of expensive debt on its balance sheet. Under the agreement, Occidental is adding three new Icahn-picked directors to its board, and bringing back a former CEO as chairman.