Stocks, oil gain as China stimulus offsets growth concerns
China’s latest move to boost its economy helped lift stocks on Wall Street and in Europe.
New York: China’s latest move to boost its economy helped lift stocks on Wall Street and in Europe, and oil prices rallied after Saudi Arabia said it would work with other producers to limit oil market volatility.
But U.S. data, showing an unexpected drop in contracts for home resales, gave some investors pause. The National Association of Realtors said its pending home sales index declined to its lowest level in a year.
"We were seeing better (U.S.) economic data over the last few weeks to show things aren`t as dire as the retail investor may have expected," said Jeffrey Carbone, senior partner at Cornerstone Financial Partners in Cornelius, North Carolina.
"When you dive deeper into the data, it’s not great but it’s not that bad."
The Dow Jones industrial average rose 69.96 points, or 0.42 percent, to 16,709.93, the S&P 500 gained 8.32 points, or 0.43 percent, to 1,956.37 and the Nasdaq Composite added 25.93 points, or 0.56 percent, to 4,616.40.
The pan-European FTSEurofirst 300 index was up 0.5 percent and MSCI`s gauge of stock across the globe gained 0.3 percent.
After Chinese markets closed, China`s central bank resumed its easing cycle, injecting an estimated $100 billion worth of long-term cash into the economy. Long-dated U.S. Treasury prices rose after the weak housing data supported the view that the Federal Reserve could slow the pace of interest rate hikes this year. Recent U.S. economic reports including a pick-up in inflation had shifted the view the Fed could raise interest rates before year-end.
The benchmark 10-year note was last up 3/32 in price to yield 1.752 percent, down from 1.764 percent late on Friday.
Finance ministers and central bankers from the Group of 20 announced an agreement to use "all policy tools – monetary, fiscal and structural – individually and collectively" to reach the group`s economic goals.
The dollar rose against a basket of six major rivals, pushing the dollar index up 0.2 percent. But the greenback tumbled against the Japanese yen, losing around 1 percent.
Gold, another investor "safe haven," rose and was on track for its best month in four years.
Crude futures rose as Saudi Arabia said it would work with other oil producers to limit oil market volatility.
Brent futures were trading at $35.98 a barrel, up 2 percent from their previous close. U.S. crude futures were up 2.5 percent at $33.40.