Many investors expect other major central banks to also act to counter a potential drag on the global economy after the Brexit vote, with some predicting further stimulus from the European Central Bank and a further delay to the U.S. Federal Reserve’s plans to raise interest rates this year. Apache lost 1.7 per cent, Devon Energy 2.5 per cent and Baker Hughes 1.2 per cent.
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Bond prices fell. The yield on the 10-year Treasury note rose to 1.43 percent from 1.36 percent.
“I wish we can be celebrating, but it’s a little disconcerting”, said Rob Bartenstein, chief executive officer of Kestra Private Wealth Services. “Although equities are higher, I don’t see much investor excitement at these levels”, said Ole Hansen, head of commodity strategy at Saxo Bank.
Sectors that investors tend to favour when they are nervous, including utilities, phone companies and makers of consumer staples, all fell as investors moved money out of lower-risk assets.
Petroleum-linked stocks retreated as oil prices fell sharply.
Increasing prospects of global economic health boosted shares, while Alcoa reported a smaller-than-expected drop in quarterly profit, sending the aluminum producer’s shares up more than 4% and helping boost optimism about the earnings season.
While second-quarter earnings of S&P 500 companies are expected to fall 5 percent, along the same lines as the first, growth is expected to occur throughout the second half of 2016.
SEAGATE SURGE: Seagate Technology surged $5.18, or 22 percent, to $29.27 after forecasting strong sales. It also announced that it will cut 6,500 jobs, about 14 percent of its total. The West Texas Intermediate (WTI) benchmark for USA crude futures rose $1.94 or 4.3% to $46.70 a barrel on the New York Mercantile Exchange.
Crude oil jumped about 5 percent with prices hitting almost $47 a barrel.
In Japan, the Nikkei 224 extended gains for another day with a rise of 0.8 percent on hopes that Prime Minister Shinzo Abe will expand bond purchases and flood financial markets with money now that his Liberal Democratic Party has won parliamentary elections.
Elsewhere in Asia, Korea’s Kospi edged up 0.1% and Hong Kong’s Hang Seng added 1.7%.
European stocks were off to a strong start, with France’s CAC 40 rising 1.3 percent to 4,321.87 and Germany’s DAX adding 1.2 percent to 9,955.73. Britain’s FTSE 100 was flat.
Shares of Nintendo jumped 12.7% in Tokyo, fuelled by the craze for Pokemon Go, a smartphone game that’s become the top grossing app in the iPhone store less than a week after its release in the US, Australia and New Zealand.
While some market damage was done by the exit, such as the nosediving value of the British pound, the USA economic climate has been thrown multiple lifelines to mitigate the harm.
Shares of American Airline rose 1.13 percent to $35.05 after the company provided a more upbeat second-quarter forecast.
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Spot gold (XAU=) recovered from its lowest in almost two weeks, and was last up 0.83 percent at $1,342.26 an ounce. The euro rose to $1.1112 from $1.1060.
