NEW YORK: U.S. stocks climbed Wednesday as investors continued to recover some confidence in the health of the global economy. That sent oil prices higher and gave energy companies a boost, while materials companies also climbed higher.
In Europe, a round of new rescue loans for Greece was unfrozen, eliminating the risk the country will default on its debts in the next few months. A survey of business sentiment in Germany, the largest economy in Europe, rose more than expected. European stock indexes rose and the U.S. market followed them. Expecting stronger demand for fuel and materials used in industry and construction, investors bought stock in energy and mining and chemicals companies. U.S. stocks had jumped Tuesday after a strong report on home sales.
Investors “feel confident that perhaps we’re seeing a stabilization of growth overseas,” said Quincy Krosby, market strategist at Prudential Financial. “Here in the U.S. the economy appears to be pulling out of the first quarter slump.”
The Dow Jones industrial average advanced 145.46 points, or 0.8 percent, to 17,851.51. The Standard & Poor’s 500 index rose 14.48 points, or 0.7 percent, to 2,090.54. The Nasdaq composite index added 33.84 points, or 0.7 percent, to 4,894.89.
Already at their highest levels since October, oil prices ticked higher after the U.S. government said fuel stockpiles decreased last week. Benchmark U.S. crude gained 94 cents, or 1.9 percent, to $49.56 a barrel in New York. Brent crude, used to price international oils, rose $1.13, or 2.3 percent, to $49.74 a barrel in London. That sent energy companies higher. Chevron added $1.58, or 1.6 percent, to $101.77 and Schlumberger rose $2.29, or 3 percent, to $77.91.
German conglomerate Bayer said it’s committed to completing its acquisition of Monsanto, and the seed company rose $2.38, or 2.2 percent, to $111.68. Monsanto rejected an offer from Bayer worth $62 billion, or $122 per share, but said Tuesday that it’s open to talks.
Elsewhere, chemicals maker LyondellBasell Industries picked up $2.26, or 2.8 percent, to $82.71. Gold and copper miner Freeport-McMoRan added 54 cents, or 4.9 percent, to $11.65.
In other deal news, Hewlett Packard Enterprise said it will sell its business service unit to CSC for $8.5 billion. The company, which was formed when Hewlett-Packard split in two last year, will focus on selling tech products to big organizations, like hardware and software for data centers. Hewlett Packard Enterprise rose $1.10, or 6.8 percent, to $17.35 and Computer Sciences surged $15, or 42.1 percent, to $50.65.
Bank stocks made some of the biggest gains as investors anticipated that interest rates will rise, allowing banks to make more money on lending. The Federal Reserve has said it wants to keep raising interest rates if the economy is strong enough. Bond prices edged lower on Wednesday, and the yield on the 10-year U.S. Treasury note rose to 1.87 percent from 1.86 percent.
Wells Fargo rose $1.30, or 2.6 percent, to $50.50 and Citigroup added $1.08, or 2.4 percent, to $46.94.
Chinese e-commerce company Alibaba fell after it said U.S. regulators are investigating its accounting practices. The company said the Securities and Exchange Commission has asked for documents and information related to its consolidated earnings and other items. The stock lost $5.53, or 6.8 percent, to $75.59.
A string of painful quarterly results for retailers continued Wednesday. Clothing and accessories chain Express reported disappointing results and gave weak projections for the rest of the year, and its stock fell $1.35, or 8.4 percent, to $14.68.
French drugmaker Sanofi said it wants to replace the entire board of cancer drug Medivation. Sanofi has offered to buy the company for $9.3 billion, or $52.50 per share, but Medivation rejected that bid and Sanofi says Medivation won’t discuss a deal. Sanofi stock gained 76 cents, or 1.9 percent, to $40.97. Medivation fell 43 cents to $61.48.
In European trading, Germany’s DAX advanced 1.5 percent. France’s CAC gained 1.1 percent while Britain’s FTSE 100 rose 0.7 percent. Japan’s Nikkei 225 rose 1.6 percent and Hong Kong’s Hang Seng index jumped 2.7 percent. South Korea’s Kospi gained 1.2 percent.
Gold fell $5.40 to $1,223.80 an ounce. The price of gold has fallen 4 percent over a six-day losing streak. Silver was unchanged at $16.26 an ounce. Copper rose 4 cents to $2.10 per pound.
In other energy trading, wholesale gasoline fell 1 cent to $1.64 a gallon. Heating oil rose 2 cents to $1.51 a gallon. Natural gas picked up 1 cent to $1.99 per 1,000 cubic feet.
The dollar rose to 110.10 yen from 109.98 yen. The euro inched up to $1.1160 from $1.1143.
