Friday, May 24, 2024

Wall Street rises again, joins worldwide upturn for markets

by Associated Press

NEW YORK (AP) — Stocks are pushing higher in early Monday trading on Wall Street, joining a worldwide upturn headlined by the best day for Chinese stocks in nearly five years.

The S&P 500 was 1.4% higher, following up on similar gains in Europe and much of Asia. Stocks in Shanghai leaped 5.7% for their biggest gain since 2015, when China’s market was in the midst of a bubble bursting. Treasury yields also climbed in another signal of improved optimism.

The Dow Jones Industrial Average was up 390 points, or 1.5%, at 26,217, as of 9:50 a.m. Eastern time, and the Nasdaq composite was up 1.6%.

They’re the latest buoyant moves for markets, where investors are focusing more on recent improvements in the job market and on all the stimulus central banks and governments are supplying than on how damaged the economy remains. Investors are also continuing to sidestep the mounting number of known coronavirus infections, at least for now.

The worry is that if the pandemic keeps worsening, with hotspots stretching across the U.S. South and West, it could scare shoppers and businesses away from spending. The worse-case scenario for markets is that the pandemic pushes governments to resume the widespread lockdown orders they implemented during the spring, which led to the worst recession in decades.

For now, though, the trend is still upward. Monday’s rally follows last week’s 4% gain for the S&P 500, which itself helped cap the best quarter for the U.S. stock market since 1998. The S&P 500 has rallied back to within 7% of the record set in February.

Economists expect a report coming Monday morning to show that U.S. services industries, which make up the bulk of the economy, stopped contracting in June. That follows reports from last week that showed U.S. employers added more workers than they cut for the second straight month and that U.S. manufacturing returned to growth in June.

Stocks whose profits are most closely tied to the strength of the economy led the way Monday. Financial stocks in the S&P 500 rose 2.4% for the biggest gain among the 11 sectors that make up the index. A stronger economy would mean fewer people defaulting on their loans, and Comerica rose 5.2%, while Regions Financial added 4.3%.

Some dealmaking also helped to lift markets Monday.

Berkshire Hathaway, led by famed bargain hunter Warren Buffett, has agreed to buy Dominion Energy’s unit that moves and stores natural gas. Berkshire Hathaway, which has a reputation for waiting until prices reach attractive lows before pouncing, will pay roughly $4 billion in cash under the deal, as well as assume $5.7 billion in debt.

Berkshire Hathaway’s Class B shares rose 2.3%. Dominion Energy fell 4.7%. While announcing the sale, it also said that it and Duke Energy were canceling a controversial $8 billion natural-gas pipeline project.

Uber rose 4.3% after it said it will buy food-delivery business Postmates for $2.65 billion in stock. The deal would fold Postmates in with Uber’s Uber Eats unit.

The yield on the 10-year Treasury rose to 0.69% from 0.67% late Thursday. Markets were closed Friday for Independence Day. The yield tends to move with investors’ expectations for the economy and inflation.

In Europe, German’s DAX returned 1.5%, and France’s CAC 40 rose 1.5%. The FTSE 100 in London added 1.7%. Retail sales rebounded in May in the 19 countries that use the euro, while car sales in Britain picked up in June as lockdown measures were eased.

In Asia, Japan’s Nikkei 225 rose 1.8%, South Korea’s Kospi gained 1.7% and the Hang Seng in Hong Kong jumped 3.8%.

Benchmark U.S. crude slipped 0.3% to $40.51 per barrel. Brent crude, the international standard, edged up 0.3% to $42.93 per barrel.

You may also like

Update Required Flash plugin