Tag Archives: Global Economy

Oil turns higher, pushes world stock markets up

NEW YORK (Reuters) – Global equity markets got a boost from an upturn in crude oil on Thursday as the market focused on an upcoming meeting of major oil producers that investors hope could stabilize volatile petroleum markets.

U.S. stock indexes were also buoyed by robust data on durable goods orders that pointed to a recovery in the struggling manufacturing sector.

The Dow Jones industrial average rose 212.37 points, or 1.29 percent, to 16,697.36, the S&P 500 gained 21.93 points, or 1.14 percent, to 1,951.73 and the Nasdaq Composite added 39.60 points, or 0.87 percent, to 4,582.21.

Crude oil futures rose more than 2 percent after Venezuela reaffirmed an oil producers meeting in mid-March that would include Saudi Arabia, Russia and Qatar. Prior to the announcement, oil was down as much as 3 percent.

The sharp turn was more of “an emotional move, people thinking they’re going to miss the boat,” said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio, about the gains in oil.

“People are trying to stay one step ahead, thinking they know what the decision of OPEC will be.”

U.S. crude futures settled up 92 cents, or 2.9 percent, at $33.07 a barrel.

Brent crude futures finished up 88 cents, or 2.6 percent, at $35.29 a barrel, hitting a three-week high.

European equity markets rose Thursday, rebounding from this week’s losses that had been spurred by fears of Britain exiting the European Union.

Europe’s FTSEurofirst 300, which has lost almost 4 percent since Tuesday, was up 2 percent as risk appetite returned.

Equity markets and oil prices have moved in sync this year so far, but analysts say they expect the two to decouple in the not-too-distant future.

MSCI’s gauge of global stock markets was up 1.1 percent.

Markets’ appetite for risk pushed traders out of safe-haven currencies like the Japanese yen, which fell 0.6 percent against the dollar.

Britain’s sterling rose 0.3 percent to $1.3970, taking a breath from a 5-percent fall since early this month on fears that a public vote on June 23 could see Britain become the first country to quit the 28-member European Union.

The dollar struggled to make much headway overall due to doubts over whether the Fed will raise rates at all this year. The euro edged up 0.15 percent to $1.1027. The dollar index, which measures the greenback against six major currencies was flat on the day.

Oil’s recovery Thursday did help increase U.S. bond market’s gauges on traders’ inflation expectations to their highest levels in nearly four weeks.

Federal Reserve policymakers have been concerned about the erosion in inflation expectations which could impair efforts to boost domestic price growth to their 2-percent goal.

The yield premiums on regular U.S. Treasuries over Treasury Inflation Protected Securities, known as inflation breakeven rates, have risen from their lowest levels since early 2009 in recent days with the rebound in oil prices.

(Additional reporting by David Gaffen in New York, Marc Jones in London, Joshua Hunt in Tokyo; Editing by Bernadette Baum and Nick Zieminski)

Oil rebound buoys Wall Street; bonds, gold erase gains

NEW YORK (Reuters) – A sharp rebound in crude prices lifted stocks on Wall Street on Wednesday in a late rally, but a gauge of equities across the globe closed lower on lingering concern about economic growth.

Crude turned higher after data showed U.S. gasoline demand spiked and the S&P 500 climbed steadily after that, ending 2 percent above its session low.

“You have a tremendous amount of underperformance out there in the hedge fund community,” said Ian Winer, director of trading at Wedbush Securities in Los Angeles. “When the market starts to turn, it starts to feed on itself because people can’t afford to miss out on a rally.”

Other assets, like Treasuries and gold, reversed course after the bounce in crude.

“As much as it frustrates people, the reality is (oil and equities) are incredibly highly correlated and they have been really going back to November,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.

The Dow Jones industrial average rose 53.21 points, or 0.32 percent, to 16,484.99, the S&P 500 gained 8.53 points, or 0.44 percent, to 1,929.8 and the Nasdaq Composite added 39.02 points, or 0.87 percent, to 4,542.61.

The 14-day correlation between the S&P 500 and U.S. crude stands at 0.93, just below the 3-1/2 year high hit earlier this month.

The bounce in the S&P contrasted with a fall in European stocks, which were weighed by energy and commodity sector names. The pan-European FTSEurofirst 300 share index fell 2.3 percent and MSCI’s gauge of stocks globally fell 0.5 percent.

Nikkei futures jumped 0.9 percent.

OIL REBOUNDS

Government data showed U.S. crude oil stockpiles rose by 3.5 million barrels in the United States last week to an all-time peak. But the increased gasoline demand over the past four weeks and a drop in inventories helped push crude futures higher.

Brent crude, the global benchmark, rose 3.7 percent to $34.50 a barrel. U.S. crude added 1.1 percent to $32.23.

The turn in oil and stocks pushed yields on the lowest-risk government bonds sharply higher, with prices ending the day slightly in the red.

Benchmark 10-year U.S. notes were last off 2/32 in price to yield 1.7501 percent. At their session low the yield was 1.647 percent.

In currency markets, the yen, which had been initially bid up on its safe-haven appeal, ended the day above 112, little changed against the U.S. dollar. It earlier reached an almost three-year high against the euro of 123.43 yen.

Sterling hit a seven-year low versus the dollar of $1.3876 on concerns Britons might vote to leave the European Union in a June referendum. It last traded down 0.7 percent at $1.3924.

The euro dipped 0.1 percent versus the greenback to $1.1008. The dollar index was flat.

Copper slipped 0.1 percent to $4,641.85 a tonne.

Spot gold retreated from major gains earlier in the day, last trading up 0.2 percent. It had risen as much as 2.1 percent.

(Reporting by Rodrigo Campos, addiitonal reporting by Noel Randewich; Editing by Nick Zieminski and Steve Orlofsky)

OPEC veteran urges oil output cut, frets about global glut

DOHA (Reuters) – OPEC and non-OPEC producers should cut production to balance the global oil market before a supply glut becomes unmanageable “like a cancer”, Qatar’s former oil minister Abdullah al-Attiyah said.

Attiyah, influential in OPEC as Qatar’s energy minister from 1992 to 2011, said a deal announced in Doha last week by Saudi Arabia and Russia to freeze production at January levels was not enough to balance the market as an oversupply continues to grow.

“If they want to balance the market the solution will be easy. Don’t go slow. If you do, then every time the market will create a glut. Cut 2.5 million barrels and then you will balance the market in a few years,” Attiyah, who says he is talking to producers in and outside of OPEC, told Reuters.

“I will ask every producer, do you want quantity or price? They say they want a reasonable price but to reach that there has to be sacrifice. If you do not sacrifice the other will not sacrifice,” he said in an interview in Doha on Monday.

“The oversupply has grown from 1.7 million barrels per day (bpd) to 3 million bpd today. I am very worried about oversupply. It is like a cancer. If you did not deal with it quickly, it would spread.”

Oil has slid around 70 percent from more than $100 a barrel in mid-2014, pressured by excess supply and a decision by the Organization of the Petroleum Exporting Countries to abandon its traditional role of cutting production alone to boost prices.

Attiyah spoke before Saudi Oil Minister Ali al-Naimi said on Tuesday he was confident more nations would join a pact to freeze output at existing levels in talks expected next month, but effectively ruled out production cuts by major crude producers anytime soon.

Addressing the annual IHS CERAWeek conference in Houston, Naimi told energy executives that growing support for the freeze and stronger demand should over time ease the glut that has pushed oil prices to their lowest levels in more than a decade.

Traders have been skeptical about whether freezing production near record levels will support the market.

Attiyah, a leading architect of Qatar’s rise to global prominence as gas exporter, said OPEC would not cut production alone but added that Saudi Arabia, the world’s largest oil exporter and defacto leader of OPEC, was willing to cooperate with other producers to balance the market.

“Saudi Arabia needs a commitment from everyone. The Saudis will be big supporters — but others have to join in,” he said.

“OPEC will never do it alone. No way OPEC will do it alone: 100 percent.”

One stumbling block in attempts to forge a wider agreement is Iran, which is increasing output following the lifting of Western sanctions in January and whose oil minister was quoted on Tuesday as calling the deal “laughable”.

(Editing by Susan Thomas)

Oil downturn sparks global equity selloff

NEW YORK (Reuters) – Global equity markets slumped on Tuesday, denting the recent recovery in riskier assets as oil prices tumbled on signs that a proposed deal to freeze output by major producers was not on the horizon.

After gains of more than 5 percent on Monday, which had helped push a gauge of world equities up more than 1 percent, both Brent and U.S. crude turned sharply lower after Saudi Oil Minister Ali Al-Naimi said he welcomed all sources of supply, while Iran was seen as unlikely to agree to an output cap.

The decline in crude weighed on both the energy and financial sectors on Wall Street. Concerns about bank exposure to the energy sector were highlighted by JP Morgan’s announcement that it will put aside an additional $500 million to cover potentially bad loans to energy companies.

Markets have been closely tethered to oil prices, which have been volatile based on the continually changing perceptions that an output deal could be reached.

“The markets are really worried that we are missing something here – that the global slowdown may be more significant than we are recognizing and that slowdown could be causing oil prices to drop,” said Tracie McMillion, head of asset allocation at Wells Fargo Private Bank in Winston-Salem, North Carolina.

U.S. crude futures settled down 4.6 percent at $31.87 a barrel and Brent settled 4.1 percent lower at $33.27 a barrel. The commodity had shown signs of stabilization above $30 a barrel recently on hopes a production freeze by major producers could be agreed upon.

The Dow Jones industrial average fell 188.88 points, or 1.14 percent, to 16,431.78, the S&P 500 lost 24.23 points, or 1.25 percent, to 1,921.27 and the Nasdaq Composite dropped 67.02 points, or 1.47 percent, to 4,503.58.

European shares also moved lower on the crude weakness, along with and disappointing updates from Standard Chartered, down 6.7 percent, and BHP Billiton, down 6.1 percent. A weak sentiment reading of German manufacturers also raised concerns about the health of the region’s largest economy.

Resources stocks, down 3.2 percent, weighed heavily on European equity indices after the world’s largest miner, BHP Billiton, posted its first loss in 16 years.

The pan-European FTSEurofirst 300 index of leading shares closed down 1.3 percent. MSCI’s index of world shares was lost 0.92 percent.

In currency markets, the British pound remained under pressure, and was down 2.7 percent on the past two sessions, its biggest two-day drop in six years, on worries Britain may leave the European Union. Sterling was last down 0.83 percent at 1.403.

The euro also fell to $1.0987 on Monday, its lowest in almost three weeks, on fears Brexit could undermine the European Union. It was last down 0.13 percent at $1.1012.

Investors’ shift towards safer ground on Tuesday pushed the dollar lower against the yen, down 0.7 percent to 112.10 yen after hitting a low of 111.75.

The dollar’s index against a basket of six major currencies was little changed, up 0.09 percent at 97.467

Benchmark 10-year U.S. Treasuries reversed earlier losses and were last up 8/32 in price to yield 1.7380 percent.

(Editing by Nick Zieminski)

Oil jump fuels global stock rally, EU shake-up fears rock currencies

NEW YORK (Reuters) – Global stocks rallied on Monday, backed by a rise in oil and commodity prices, while the British pound suffered its biggest one-day loss in nearly six years against the dollar on fears Britain would leave the European Union.

Sterling tumbled to a near seven-year low during the session after popular London Mayor Boris Johnson said he would campaign to leave the EU ahead of a June 23 referendum. The euro fell 0.9 percent.

Battered oil prices jumped as speculation about falling U.S. shale output helped feed the notion that crude prices may be bottoming after their 20-month collapse.

Benchmark Brent settled up 5.1 percent to $34.69 a barrel, while U.S. crude settled up 6.2 percent at $31.48 a barrel.

Stocks, whose performance has been tightly linked to oil prices, posted solid gains across major markets.

“It still seems like oil, for whatever reason, continues to be what everything is trading off of,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. “That’s the signal that the world is OK, that oil prices are going up.”

The Dow Jones industrial average rose 228.67 points, or 1.39 percent, to 16,620.66, the S&P 500 gained 27.72 points, or 1.45 percent, to 1,945.5 and the Nasdaq Composite added 66.18 points, or 1.47 percent, to 4,570.61.

All 10 major S&P sectors were higher, led by a 2.2 percent increase for the energy sector.

The gains built on last week’s strong performance after a poor overall start for U.S. equities in 2016.

“The fact that we held it on Friday and then went through a weekend and sustained and advanced it even more, I think is building optimism and maybe we’ve turned a corner,” said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

The pan-European FTSEurofirst 300 share index rose 1.7 percent. Mining stocks were among the best performers, with Anglo American rising 10.8 percent, as the price of copper reached a two-week high.

Helped by mining shares, Britain’s FTSE 100 index rose 1.5 percent, despite concerns over a possible EU exit.

Stocks shrugged off a survey showing private sector business activity in the euro zone increased at its weakest pace in more than a year in February.

MSCI’s index of world shares rose 1.3 percent.

Worries about a possible British exit from the EU sent the euro to a near three-week low. Sterling fell 1.8 percent against the greenback and dropped as low as $1.4057.

“A Brexit would be bad for sterling, but it would also be bad for the euro,” said Neil Jones, Mizuho’s head of hedge fund sales in London.

The dollar was up 0.8 percent against a basket of six currencies.

U.S. Treasury prices ended lower as rising stock and oil prices reduced demand for safe haven debt.

Benchmark 10-year notes fell 5/32 in price to yield 1.77 percent, up from 1.75 percent late Friday.

Zinc prices surged to a four-month peak and other base metals also gained as investors’ appetite for risk increased while they also worried about potential shortages.

Gold fell 1.7 percent as the dollar strengthened and investor appetite for risk increased.

(Additional reporting by Karen Brettell and Dion Rabouin in New York, Nigel Stephenson and Jemima Kelly and Danilo Masoni in Milan; Editing by Catherine Evans, John Stonestreet and Nick Zieminski)

Global stocks slip after good week, as oil prices lose gains

NEW YORK (Reuters) – Major world stock markets slipped on Friday, but still had their best week this year, as crude oil prices stabilized.

Yields on short-dated U.S. bond yields rose though after U.S. inflation data raised the possibility the Federal Reserve may raise interest again earlier than anticipated.

Crude oil prices slipped also on Friday but still posted gains for the week for the first time this month.

Advances in oil and equity prices this week were sparked by moves by oil producers, including Saudi Arabia and Russia, to cap output, but a record buildup in U.S. crude oil stockpiles kindled worries over persisting global oversupply.

The renewed weakness in oil prices on Friday affected U.S. stocks, with the S&P energy index closing 0.35 percent as the worst performer of the 10 major S&P indexes.

“We have seen oil come back off and that has put some pressure on the market,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.

MSCI’s index of world shares was 0.25 percent lower, but was up 3.7 percent for the week, its best since October.

“We have had a lot of very concerning economic data in the first six weeks of the year, and I think over the last few weeks we have seen a significant improvement in that data,” said Tony Roth, chief investment officer at Wilmington Trust in Wilmington, Delaware.

The Dow Jones industrial average fell 0.13 percent on Friday to 16,391.58, while the S&P 500 was little changed at 1,917.76, and the Nasdaq Composite added 0.38 percent to 4,504.43.

The S&P 500 index gained 2.8 percent for the week though, its best weekly performance since November.

The pan-European FTSEurofirst 300 index of leading shares lost 0.7 percent, weighed by weakness in oil, bank and auto shares, but was still up nearly 4 percent for the week.

Brent crude oil futures slumped 3.7 percent to settle at $33.01 a barrel while U.S. crude settled down 3.7 percent at $29.64. U.S. WTI crude was up 1.1 percent for the week.

The global oil market is oversupplied by around 1.8 million barrels per day, but that glut could be halved if a deal to freeze oil production at last month’s levels takes effect, a top Russian energy official said on Friday.

YIELDS RISE ON U.S. INFLATION DATA

Yields on benchmark 10-year Treasuries edged up to around 1.75 percent, while yields on shorter-dated U.S. two-year Treasury notes rose to 0.7459 percent.

U.S. underlying inflation in January rose by the most in nearly 4-1/2 years, according to data U.S. Labor Department data on Friday, suggesting the Federal Reserve could gradually raise interest rates this year as forecast in December.

However, following similar comments from other Fed officials in the past week, Cleveland Fed President Loretta Mester said on Friday that interest rates will likely need to remain accommodative for some time, while other officials maintain that weak inflation and global turbulence are enough reasons to pause on further hikes.

“While the data have been a mixed bag, fears of a recession have been overblown,” said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon.

The Japanese yen rose against the U.S. dollar to $112.68 and the euro rose against the greenback also, trading up 0.2 percent at $1.1018. The U.S. dollar dipped against an index of major currencies.

After gains last year, in anticipation of the Federal Reserve interest rate rise in December, the U.S. dollar has weakened in recent weeks as expectations for further rate rises have declined.

The British pound strengthened late and was last up 0.28 percent to 1.4371 against the dollar after Lithuanian President Dalia Grybauskaite said in a tweet that European Union leaders agreed on Friday on a deal to keep Britain in the 28-nation bloc.

(Additional reporting by Lewis Krauskopf; Editing by Clive McKeef)

Wall Street falls, snapping three-day rally

(Reuters) – Wall Street closed lower on Thursday, ending a three-day winning streak, as Wal-Mart shares dragged on the market after a lackluster earnings report and oil prices pulled back.

Eight of the 10 major S&P sectors finished negative, led by a 0.9 percent decline in energy, which had helped drive the recent rally.

Wal-Mart Stores Inc fell 3 percent after the world’s largest retailer reported a lower quarterly profit and gave a tepid sales outlook. The stock was the biggest percentage loser in the Dow index.

After the market closed, department store operator Nordstrom Inc reported lower-than-expected quarterly profit and its shares sank 7 percent.

Declines were limited by IBM, which rose 5 percent after Morgan Stanley upgraded the stock to “overweight.”

As oil prices have slid, the stock market’s performance has been tightly tied to the commodity. After rallying in recent days, oil prices came off session highs on Thursday and benchmark Brent settled lower after data showed a build in U.S. crude inventories.

Thursday’s stock market declines stalled momentum after the S&P 500 posted its first three-day rally of 2016, tallying a 5.3 percent gain over the period. The benchmark index remains down 6.2 percent so far this year amid investor jitters over the battered price of oil and a slowing Chinese economy.

“We’ve had a pretty significant bounce,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “Today is just a bit of profit-taking from those that have benefited from the significant move.”

The Dow Jones industrial average fell 40.4 points, or 0.25 percent, to 16,413.43, the S&P 500 lost 8.99 points, or 0.47 percent, to 1,917.83 and the Nasdaq Composite dropped 46.53 points, or 1.03 percent, to 4,487.54.

“What did the best the last three days … are pulling back the most today,” said Aaron Jett, vice president of global equity research at Bel Air Investment Advisors in Los Angeles, pointing to areas such as energy and biotech.

Economic data provided some solace for U.S. prospects. Data showed the number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to labor market strength.

Corporate earnings were mixed. Nvidia climbed 8.6 percent to $30.04 after the chipmaker’s revenue beat expectations.

But Dish Network fell 6.3 percent to $43.17 after it reported lower net income in 2015 amid a drop in pay-TV subscriptions.

Perrigo slid 10.2 percent to $130.40 after the drugmaker’s adjusted profit missed estimates.

About 8.1 billion shares changed hands on U.S. exchanges, below the 9.5 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 1,555 to 1,473, for a 1.06-to-1 ratio on the upside; on the Nasdaq, 1,677 issues fell and 1,099 advanced for a 1.53-to-1 ratio favoring decliners.

The S&P 500 posted 9 new 52-week highs and 2 new lows; the Nasdaq recorded 17 new highs and 51 new lows.

(Reporting by Lewis Krauskopf in New York; additional reporting by Abhiram Nandakumar and Yashaswini Swamynathan in Bengaluru; Editing by Chris Reese and Chizu Nomiyama)

Snyder: World facing global economic meltdown

The global economy is on the brink of a meltdown, Michael Snyder says in a new blog post.

2832-jim-bakker-show-michael-snyder

Writing for his blog, “The Economic Collapse,” the frequent Jim Bakker Show guest on Tuesday published a list of 21 items he believes show “the global economy is coming apart at the seams.”

Snyder pointed to declining global trade figures, struggles in the energy sector and significant losses in global stock markets as indicators of an impending economic implosion.

“The truth is that we are in the early chapters of a brand new economic meltdown, and I believe that all of the signs indicate that it will continue to get worse in the months ahead,” he wrote.

Snyder is at Morningside today and is slated to discuss recent military developments in the Middle East, as well as their potential implications, during a taping of The Jim Bakker Show.

In Tuesday’s post, Snyder wrote he is “deeply concerned” that the recent military activity may possibly lead to the beginning of World War III, a topic he covered in another recent blog post.

“Without any outside influences, the global economy and the global financial system will continue to rapidly fall apart,” Snyder wrote in Tuesday’s post. “But if we do have a major ‘black swan event’ take place, that could cause the bottom to fall out at any moment.”

The show featuring Snyder is scheduled to air beginning Feb. 23, though viewers can obtain exclusive early access by visiting the PTL Television Network on Roku or the Video on Demand section of jimbakkershow.com.

Led by energy shares, Wall Street rallies for third straight session

(Reuters) – U.S. stocks tallied their third straight session of gains on Wednesday, led by energy shares as oil prices jumped, while better-than-expected economic data helped allay growth fears.

Nine of the 10 major S&P sectors closed higher, with energy rising 2.9 percent.

The S&P 500 posted its first three-day rally of 2016, and ended with its biggest three-day percentage rise since August. With Wednesday’s performance, the Dow industrials had erased nearly all its losses for February.

Still, the benchmark S&P remains down 5.7 percent this year. The steep slide in oil, whose performance has been tightly tied to equities, along with fears of a China-led slowdown in global growth have rattled markets.

Oil prices rose 7 percent on Wednesday after Iran voiced support for a Russia-Saudi-led move to freeze production. Data also showed U.S. industrial production in January rose by the most in 14 months.

“Oil continues to directionally trade with equities and oil prices are higher, and more important, economic data recently has been better than feared,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City.

“Meanwhile, the backdrop for equities is oversold…This has certainly compelled some folks who are under-invested to get back into the stock market,” Ware said.

The Dow Jones industrial average rose 257.42 points, or 1.59 percent, to 16,453.83, the S&P 500 gained 31.24 points, or 1.65 percent, to 1,926.82 and the Nasdaq Composite added 98.11 points, or 2.21 percent, to 4,534.07.

The U.S. indexes built on their gains after minutes from the U.S. Federal Reserve’s January policy meeting were released in the afternoon.

The minutes showed Fed policymakers worried last month that tighter global financial conditions could hit the U.S. economy and considered changing their planned path of interest rate hikes in 2016.

“The sense of what has come out of that, is that you’re not going to see a rate hike in March and you may not even see one in June,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “What it has done basically is taken that potentially negative issue off the table for the time being.”

Kinder Morgan shares rose 10 percent to $17.18 and led a rally in energy infrastructure-tied companies after Berkshire Hathaway disclosed a stake in the pipeline operator.

Priceline closed 11.2 percent higher at $1,235.56 after the travel websites operator’s profit beat expectations.

Fossil surged 28.6 percent to $44.30 after the watchmaker’s quarterly results beat estimates.

About 9.1 billion shares changed hands on U.S. exchanges, below the 9.5 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 2,562 to 528, for a 4.85-to-1 ratio on the upside; on the Nasdaq, 2,057 issues rose and 768 fell for a 2.68-to-1 ratio favoring advancers.

The S&P 500 posted 14 new 52-week highs and 2 new lows; the Nasdaq recorded 20 new highs and 45 new lows.

(Reporting by Lewis Krauskopf in New York; additional reporting by Abhiram Nandakumar and Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty and Chizu Nomiyama)

Wall Street climbs again as consumer, industrial shares surge

(Reuters) – Wall Street minted its second straight session of solid gains on Tuesday, as investors snatched up beaten-down consumer discretionary, industrial and tech shares.

All 10 S&P sectors closed higher following an extended holiday weekend. Financials, healthcare and materials also posted gains of more than 1.5 percent.

Building on Friday’s rally, the S&P 500 tallied its biggest two-day percentage gain since August.

Slumping oil prices, fears of a China-led slowdown in global growth and uncertainty over central bank monetary policies have roiled the markets this year. The S&P 500 remains down 7.3 percent in 2016.

“I think you can make a case that a lot of stocks are oversold, and therefore they should be drawing some buyers from the sidelines,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. “The question is if we can sustain this rally for several days.”

The Dow Jones industrial average rose 222.57 points, or 1.39 percent, to 16,196.41, the S&P 500 gained 30.8 points, or 1.65 percent, to 1,895.58 and the Nasdaq Composite added 98.44 points, or 2.27 percent, to 4,435.96.

Investors are holding the most cash since November 2001, which should be interpreted as an “unambiguous buy” signal, Bank of America Merrill Lynch said in its February global fund managers survey.

U.S. equity market performance has been closely tied to oil prices as the commodity’s 1-1/2-year slide has deepened. Oil prices erased early gains on Tuesday after Russia and Saudi Arabia dashed expectations of an outright supply cut, but some investors took solace from the fact that the producers were in discussions.

“I take it as extremely positive news that the U.S. market is rallying on a day that crude is down,” Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “We may be finally breaking that toxic correlation that we’ve been seeing that has been turning the entire financial world on its head.”

The S&P energy sector climbed 0.8 percent, but lagged the broader index.

Boeing shares gained 3.7 percent to $112.60 and were the biggest boost to the Dow.

ADT soared 47.5 percent to $39.64 after private equity firm Apollo Global Management agreed to buy the electronic security services provider for $7 billion. Apollo rose 5.4 percent to $14.12.

Community Health Systems slumped 22.1 percent to $14.56 and weighed on other hospital operators after posting an unexpected quarterly loss.

Groupon surged 41.2 percent to $4.08 after Alibaba disclosed a 32.9 million share stake in the company. Alibaba was up 8.9 percent at $66.29.

Advancing issues outnumbered declining ones on the NYSE by 2,522 to 578, for a 4.36-to-1 ratio on the upside; on the Nasdaq, 2,208 issues rose and 606 fell for a 3.64-to-1 ratio favoring advancers.

The S&P 500 posted 9 new 52-week highs and 3 new lows; the Nasdaq recorded 15 new highs and 67 new lows.

About 8.6 billion shares changed hands on U.S. exchanges, below the 9.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Reporting by Lewis Krauskopf in New York; additional reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza and Meredith Mazzilli)