Comments
New York, May 31 US stocks had 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 per cent 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 US 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.
5-Star Movement renews attempt
Stocks reversed Tuesday's slide as Italy's 5-Star Movement made a renewed attempt to form a coalition government and called for euroskeptic 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 posted the biggest gains of the 11 major sectors of the S&P 500. The energy index rose 3.1 per cent, its biggest one-day gain in seven weeks, as US crude oil prices settled up 2.2 per cent.
“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 rose 306.33 points, or 1.26 per cent, to 24,667.78, the S&P 500 gained 34.15 points, or 1.27 per cent, to 2,724.01, and the Nasdaq Composite added 65.86 points, or 0.89 per cent, to 7,462.45.
Russell 2000 index
The Russell 2000 index of small-cap stocks rose 1.5 per cent to end at an all-time closing high, buoyed by data confirming the strength of the US economy. Small-cap US companies generally are more domestically focused than their large-cap counterparts.
US GDP data
Payroll processor ADP's monthly report showed US 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 per cent annual rate.
Cloud-based business software maker Salesforce.com rose 1.9 per cent and computer and printer maker HP Inc jumped 4.0 per cent 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 favored 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 US exchanges was 6.83 billion shares, compared to the 6.59 billion average for the full session over the last 20 trading days.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.