Wall Street rebounds as Italy worries ease; energy shares soar

By April Joyner NEW YORK (Reuters) - U.S. stocks ended higher on Wednesday, and the S&P 500 and Dow registered their biggest daily percentage gains since May 4, on signs of easing political turmoil in Italy and as a surge in oil prices boosted energy stocks.

Reuters May 31, 2018 04:05:07 IST
Wall Street rebounds as Italy worries ease; energy shares soar

Wall Street rebounds as Italy worries ease energy shares soar

By April Joyner

NEW YORK (Reuters) - U.S. stocks ended higher on Wednesday, and the S&P 500 and Dow registered their biggest daily percentage gains since May 4, on signs of easing political turmoil in Italy and as a surge in oil prices boosted energy stocks.

The S&P 500's gains erased the losses of Tuesday, when the index posted its first 1 percent drop in May. Fears about instability in Italy and the possibility of the country's exit from the euro sent investors piling into safety assets on Tuesday. The U.S. Treasury market, on a total return basis, on Tuesday had its best day since at least July 2011, according to the Bloomberg Barclay's Treasury Aggregate Index.

Stocks reversed Tuesday's slide as Italy's 5-Star Movement made a renewed attempt to form a coalition government and called for eurosceptic Paolo Savona to withdraw his candidacy as economy minister.

The Italian government's successful auction of five- and 10-year bonds also assuaged concerns about the country's ability to finance itself after a sell-off in bonds on Tuesday resulted in the biggest one-day surge for two-year yields in 26 years.

Energy stocks <.SPNY> posted the biggest gains of the 11 major sectors of the S&P 500. The energy index rose 3.1 percent, its biggest one-day gain in seven weeks, as U.S. crude oil prices settled up 2.2 percent.

"The risk of Italy leaving the euro is remote," said Kate Warne, investment strategist at Edward Jones in St. Louis. "It's a source of volatility but not a source of true concern for the financial markets."

The Dow Jones Industrial Average <.DJI> rose 306.33 points, or 1.26 percent, to 24,667.78, the S&P 500 <.SPX> gained 34.15 points, or 1.27 percent, to 2,724.01, and the Nasdaq Composite <.IXIC> added 65.86 points, or 0.89 percent, to 7,462.45.

The Russell 2000 index of small-cap stocks <.RUT> rose 1.5 percent to end at an all-time closing high, buoyed by data confirming the strength of the U.S. economy. Small-cap U.S. companies generally are more domestically focused than their large-cap counterparts.

Payroll processor ADP's monthly report showed U.S. private sector employment increased by 178,000 jobs in May. The Commerce Department revised its estimate of first-quarter gross domestic product growth slightly downward, but economists estimate that GDP growth in the second quarter would rise above a 3 percent annual rate.

Cloud-based business software maker Salesforce.com rose 1.9 percent and computer and printer maker HP Inc jumped 4.0 percent after both companies raised their full-year profit forecasts.

Advancing issues outnumbered declining ones on the NYSE by a 4.05-to-1 ratio; on Nasdaq, a 2.13-to-1 ratio favoured advancers.

The S&P 500 posted 28 new 52-week highs and two new lows; the Nasdaq Composite recorded 197 new highs and 33 new lows.

Volume on U.S. exchanges was 6.83 billion shares, compared to the 6.59 billion average for the full session over the last 20 trading days.

(Additional reporting by Medha Singh in Bengaluru; Editing by James Dalgleish and Leslie Adler)

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

Updated Date:

TAGS:

also read

Rockets hit near U.S. forces and contractors in Iraq in separate attacks -officials
World

Rockets hit near U.S. forces and contractors in Iraq in separate attacks -officials

BAGHDAD (Reuters) - Rockets hit near U.S. forces and contractors in Iraq on Wednesday, including an air base north of Baghdad and a military base at Baghdad International Airport, the Iraqi army and security officials said. The army reported at least three rockets hit Balad air base, where U.S

Italian police probe subcontractor to Burberry over labour exploitation -warrant
World

Italian police probe subcontractor to Burberry over labour exploitation -warrant

By Silvia Ognibene and Silvia Aloisi FLORENCE, Italy (Reuters) -Italian police have arrested a Chinese couple accused of running a leather goods business which exploited immigrant workers it employed to make handbags for a Burberry supplier, according to an arrest warrant seen by Reuters. Tax police in Florence said in a statement that the two Chinese nationals were arrested on Wednesday as part of an investigation into alleged labour exploitation and tax fraud and that restrictive measures had been imposed on two other family members, including a ban on them leaving Italy

U.S. blacklists four Nicaraguans, including Ortega's daughter
World

U.S. blacklists four Nicaraguans, including Ortega's daughter

WASHINGTON (Reuters) - The United States on Wednesday blacklisted four Nicaraguans, including a daughter of President Daniel Ortega, as Washington warned it would continue to use diplomatic and economic tools against members of the leftist government engaged in repression. The U.S. State Department called on Ortega to release detained presidential candidates as well as other civil society and opposition leaders arrested over the past week in what Washington called "an increasing wave of repression." "There are costs for those who are complicit in the regime's repression.