Oil gains, stocks rally on renewed recovery hopes

By Herbert Lash NEW YORK (Reuters) - Crude prices rose and a gauge of global equities broke out of a three-week trading range on Wednesday as investors bet on a rapid recovery from the coronavirus-induced recession. Oil prices climbed 3%-4% on signs of improving demand and a drawdown in U.S. crude inventories, while a surge in Facebook Inc and Amazon.com Inc to record highs lifted the Nasdaq to within 5% of its all-time high

Reuters May 21, 2020 02:05:23 IST
Oil gains, stocks rally on renewed recovery hopes

Oil gains stocks rally on renewed recovery hopes

By Herbert Lash

NEW YORK (Reuters) - Crude prices rose and a gauge of global equities broke out of a three-week trading range on Wednesday as investors bet on a rapid recovery from the coronavirus-induced recession.

Oil prices climbed 3%-4% on signs of improving demand and a drawdown in U.S. crude inventories, while a surge in Facebook Inc and Amazon.com Inc to record highs lifted the Nasdaq to within 5% of its all-time high.

U.S. Treasury yields were little changed and gold edged higher, but gains were limited as risk appetite improved.

The markets are expecting economic recovery sooner rather than later, though there is a risk the slowdown isn't as temporary as some think, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

"There's a view that as the economy reopens there hasn't been, so far, a resurgence in the hospitalization rates and that perhaps some of the 'worst-ever' data that we've seen will soon be behind us," Arone said.

MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 1.40% to within 1 point of 500, after the benchmark was unable to climb past 495 the past three weeks.

The pan-European STOXX 600 index <.STOXX> rose 0.98% to close just shy of a three-week high, led by the tech, chemicals and energy sectors.

On Wall Street, the Dow Jones Industrial Average <.DJI> rose 381.62 points, or 1.58%, to 24,588.48. The S&P 500 <.SPX> gained 50.34 points, or 1.72%, to 2,973.28, and the Nasdaq Composite <.IXIC> added 185.64 points, or 2.02%, to 9,370.75.

Two-thirds of 223 fund managers surveyed by Bank of America reckon recent equity gains indicate a bear-market rally.

Federal Reserve policymakers re-upped a pledge to keep interest rates near zero until they are confident the U.S. economy is on track to recovery, a detailed summary of their most recent policy-setting meeting shows.

The 10-year Treasury notes fell 2.8 basis points to yield 0.6834%.

U.S. crude inventories fell by 5 million barrels last week, Energy Information Administration data showed, while Cushing, Oklahoma, stocks dropped by 5.6 million barrels. [EIA/S]

U.S. crude futures rose $1.53 to settle at $33.49 a barrel, while Brent gained $1.10 to settle at $35.75 a barrel.

The euro extended gains on Monday's French-German proposal for a 500 billion euro common fund that could move Europe closer to a fiscal union.

The euro rose 0.59% to $1.0985 and the dollar index <=USD> fell 0.445%. The Japanese yen strengthened 0.22% versus the greenback at 107.50 per dollar.

U.S. gold futures settled up 0.4% to $1,752.10 an ounce.

(Reporting by Herbert Lash; Editing by Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.