Wall Street rises again, joins worldwide upturn for markets

Business News

A woman wearing a face mask stands in front of a bank’s electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday, July 6, 2020. Asian stock markets rose Monday as investors looked ahead for data they hope will support optimism about a global economic recovery. (AP Photo/Vincent Yu)

NEW YORK (AP) — U.S. stocks are pushing higher in Monday morning trading, joining a worldwide upturn headlined by the best day for Chinese stocks in nearly five years.

The S&P 500 was 1.4% higher, following up on similar gains in Europe and much of Asia. Stocks in Shanghai leaped 5.7% for their biggest gain since 2015, when China’s market was in the midst of a bubble bursting. Treasury yields also climbed in another signal of rising optimism after economic reports showed improvements in the United States and Europe.

The Dow Jones Industrial Average was up 329 points, or 1.3%, at 26,156, as of 10:45 a.m. Eastern time, and the Nasdaq composite was up 2%.

They’re the latest buoyant moves for markets, where investors are focusing more on recent improvements in the job market and all the stimulus that central banks and governments are supplying than on how damaged the economy remains. Investors are also continuing to sidestep the mounting number of known coronavirus infections, at least for now.

The worry is that if the pandemic keeps worsening, with hotspots stretching across the U.S. South and West, it could scare shoppers and businesses away from spending. The worse-case scenario for markets is that governments resume the widespread lockdowns implemented during the spring, which led to the sudden recession that swept the world, and choke off the budding economic recovery.

For now, though, the trend is still upward. Monday’s rally follows last week’s 4% gain for the S&P 500, which itself helped cap the best quarter for the U.S. stock market since 1998. The S&P 500 has rallied back to within 7% of the record set in February.

A report released Monday morning showed that U.S. services industries, which make up the bulk of the economy, snapped back to growth in June. The results were much stronger than economists expected. They also followed reports from last week that showed U.S. employers added more workers than they cut for the second straight month and that U.S. manufacturing returned to growth in June.

Stocks whose profits are most closely tied to the strength of the economy led the way Monday. Financial stocks in the S&P 500 rose 2% for one of the biggest gains among the 11 sectors that make up the index. A stronger economy would mean fewer people defaulting on their loans and more workers able to invest. Discover Financial Services rose 4.1%, while Citibank added 2.8%.

Miner Freeport-McMoRan jumped 8% for the largest gain in the S&P 500 after it said sales of copper and gold were higher in the latest quarter than it earlier forecast.

Some dealmaking also helped to lift markets Monday.

Berkshire Hathaway, led by famed bargain hunter Warren Buffett, has agreed to buy Dominion Energy’s unit that moves and stores natural gas. Berkshire Hathaway, which has a reputation for waiting until prices reach attractive lows before pouncing, will pay roughly $4 billion in cash under the deal, as well as assume $5.7 billion in debt.

Berkshire Hathaway’s Class B shares rose 2.1%. Dominion Energy fell 7.1%. While announcing the sale, it also said that it and Duke Energy were canceling a controversial $8 billion natural-gas pipeline project.

Duke dropped 2.4%.

Uber rose 5.9% after it said it will buy food-delivery business Postmates for $2.65 billion in stock. The deal would fold Postmates in with Uber’s Uber Eats unit.

The yield on the 10-year Treasury rose to 0.70% from 0.67% late Thursday. Markets were closed Friday for Independence Day. The yield tends to move with investors’ expectations for the economy and inflation.

In Europe, German’s DAX returned 1.2%, and France’s CAC 40 rose 1.2%. The FTSE 100 in London added 1.6%. Retail sales rebounded in May in the 19 countries that use the euro, while car sales in Britain picked up in June as lockdown measures were eased.

In Asia, Japan’s Nikkei 225 rose 1.8%, South Korea’s Kospi gained 1.7% and the Hang Seng in Hong Kong jumped 3.8%.

Benchmark U.S. crude rose 0.3% to $40.79 per barrel. Brent crude, the international standard, gained 0.8% to $43.17 per barrel.

AP Business Writer Joe McDonald contributed.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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