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

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.