Monday, May 20, 2024

Stocks climb on Wall Street after Europe agrees on virus aid

by Associated Press

Stocks are rising broadly on Wall Street in early trading Tuesday after investors were encouraged to see European leaders come together to agree on a budget and coronavirus relief fund worth more than $2 trillion. The S&P 500 rose 0.6% in the early going, building on its gain from a day earlier. European markets were also higher. Traders sent the stocks of Coca-Cola and Philip Morris International higher after the companies reported earnings in the latest quarter that beat analysts’ forecasts. The price of oil was also up 3%, an encouraging sign that markets hope economies will continue to recover.

Global stock markets rose on Tuesday after European leaders worked out a deal to support their virus-stricken economies.

Shares rose in Paris, Frankfurt and London after a day of gains in Asia, while U.S. futures pointed to gains on Wall Street.

The 27 EU leaders agreed to a 1.8 trillion-euro ($2.1 trillion) budget and coronavirus recovery fund after one of their longest summits ever. To cope with the biggest recession in its history, the EU will establish a 750 billion-euro ($858 billion) coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the hardest-hit countries.

That is in addition to the agreement on the seven-year, 1 trillion-euro ($1.14 trillion) EU budget that leaders were haggling over even before the pandemic.

Germany’s DAX jumped 1.7% to 13,272, putting it in positive territory for the year after a massive plunge during the pandemic. France’s CAC 40 added 1.2% to 5,155, and Britain’s FTSE 100 climbed 0.6% to 6,297. Dow futures gained 06% and those for the S&P 500 future advanced 0.7%.

Investors also were encouraged by news from scientists at Oxford University that their experimental coronavirus vaccine prompted a protective immune response in hundreds of people who got the shot in an early trial.

Other projects are under way. A vaccine under development by colleagues of Dr. Anthony Fauci, the nation’s top infectious diseases expert at the National Institutes of Health, and Moderna Inc., will start its final testing around July 27. The 30,000-person study is intended to prove if the shots are strong enough to protect against the coronavirus.

“Ebullience around positive vaccine and the recent round of robust macro data continues to float markets in rough seas,” said Stephen Innes, chief global markets strategist at AxiCorp.

Japan’s benchmark Nikkei 225 gained 0.7% to 22,884.22. South Korea’s Kospi jumped 1.4% to 2,228.83. Australia’s S&P/ASX 200 added 2.6% to 6,156.30. Hong Kong’s Hang Seng rose 2.3% to 25,635.66, while the Shanghai Composite edged 0.2% higher to 3,320.89. Shares also rose in Taiwan and Southeast Asia.

Asian economies have been carrying out a “new-normal” balancing act of opening economies, with people going shopping and eating out, while doing social distancing and wearing masks.

That’s had mixed results, with cases shooting up recently in Tokyo to triple-digit figures for daily newly confirmed cases, and confirmed 237 cases for Tuesday. Japan had so far avoided the massive cases and deaths seen in harder hit nations like the U.S., India, Brazil and parts of Europe. Japan has confirmed nearly 26,000 cases and about 1,000 deaths.

Technology and communications stocks and big e-commerce retailers have benefited this year as the pandemic has forced people to largely stay home and rely increasingly on the internet for shopping, work and entertainment. Banks, airlines and cruise lines have suffered.

Still, worries remain that the rise of coronavirus counts will derail efforts to reopen businesses shut down due to the pandemic.

“Stocks continue to act as if we have already beaten COVID-19 and every potential health risk known to man,” said Michael Every, a global strategist at RaboBank Research.

“Lights at the end of the tunnel can be either an exit or trains coming towards us, and some might want to consider that in some key cases it could still prove to be either,” he added.

The price of benchmark U.S oil added $1.03 to $41.84 a barrel in electronic trading on the New York Mercantile Exchange. It gained 22 cents to $40.81 a barrel Monday. Brent crude oil, the international standard, rose $1.10 to $44.38 a barrel.

The dollar rose to 107.26 Japanese yen from 107.20 yen. The euro edge up to $1.1451 from $1.1444.

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