Oil gains, stocks rally on renewed recovery hopes - Metro US

Oil gains, stocks rally on renewed recovery hopes

FILE PHOTO: Floor traders work space is seen on the trading floor after the closing bell, following traders positive for Coronavirus disease (COVID-19), at the NYSE in New York

NEW YORK (Reuters) – Crude prices rose and a gauge of global equities broke out of a three-week trading range on Wednesday as investors bet on a rapid recovery from the coronavirus-induced recession.

Oil prices climbed 3%-4% on signs of improving demand and a drawdown in U.S. crude inventories, while a surge in Facebook Inc and Amazon.com Inc to record highs lifted the Nasdaq to within 5% of its all-time peak.

U.S. Treasury yields were little changed and gold edged higher, but gains were limited as risk appetite improved.

The markets are expecting economic recovery sooner rather than later, though there is a risk the slowdown isn’t as temporary as some think, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

“There’s a view that as the economy reopens there hasn’t been, so far, a resurgence in the hospitalization rates and that perhaps some of the ‘worst-ever’ data that we’ve seen will soon be behind us,” Arone said.

MSCI’s gauge of stocks across the globe gained 1.36% to within 1 point of 500, after the benchmark was unable to climb past 495 the past three weeks.

The pan-European STOXX 600 index rose 0.98% to close just shy of a three-week high, led by the tech, chemicals and energy sectors.

On Wall Street, the Dow Jones Industrial Average rose 369.04 points, or 1.52%, to 24,575.9. The S&P 500 gained 48.67 points, or 1.67%, to 2,971.61 and the Nasdaq Composite added 190.67 points, or 2.08%, to 9,375.78.

Two-thirds of 223 fund managers surveyed by Bank of America reckon recent equity gains indicate a bear-market rally.

Federal Reserve policymakers re-upped a pledge to keep interest rates near zero until they are confident the U.S. economy is on track to recovery, a detailed summary of their most recent policy-setting meeting showed.

The 10-year Treasury notes fell 2.1 basis points to yield 0.6899%.

U.S. crude inventories fell by 5 million barrels last week, Energy Information Administration data showed, while Cushing, Oklahoma, stocks dropped by 5.6 million barrels. [EIA/S]

U.S. crude futures rose $1.53 to settle at $33.49 a barrel, while Brent gained $1.10 to settle at $35.75 a barrel.

The euro extended gains on Monday’s French-German proposal for a 500 billion euro common fund that could move Europe closer to a fiscal union.

The euro rose 0.51% to $1.0977 and the dollar index fell 0.382%. The Japanese yen strengthened 0.15% versus the greenback at 107.57 per dollar.

U.S. gold futures settled up 0.4% to $1,752.10 an ounce.

(Reporting by Herbert Lash; Editing by Leslie Adler and Alistair Bell)

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