Stocks climb on Wall Street after Europe agrees on virus aid
Energy companies and banks are leading stocks broadly higher on Wall Street in early trading Tuesday, extending the market’s recent run of gains.
The S&P 500 was up 0.6%. The gains followed strength in markets overseas as investors welcomed news that European leaders have agreed on a budget and coronavirus relief fund worth more than $2 trillion. The move comes as the pressure intensifies on Congress and the White House to reach a deal on another economic aid package before the end of the month.
Investors also have their eye on the latest batch of quarterly report cards from companies. Coca-Cola and Philip Morris International shares rose after the companies reported earnings in the latest quarter that beat analysts’ forecasts.
Energy companies notched the biggest gains among the 11 sectors in the S&P 500 as the price of oil climbed more than 3%, an encouraging sign that markets hope economies will continue to recover. Treasury yields were mixed.
The Dow Jones Industrial Average was up 279 points, or 1%, to 26,958. The Nasdaq was essentially flat a day after notching its best day since the end of April and its latest all-time high. Small company stocks were faring better than the rest of the market. The Russell 2000 index climbed 1.4%.
Wall Street has been on a solid run in July, mounting a three-week winning streak following improvements in hiring, retail sales and other parts of the economy, along with rising hopes for a COVID-19 vaccine.
The Federal Reserve’s efforts to support markets and expectations that Washington will deliver more financial aid to help Americans weather the economic downturn have been key in keeping markets mostly pushing higher since stocks plunged in March.
The overall S&P 500 index has rallied back to within 4% of its record set in February and is back to where it was in early June.
Still, worries remain that the rise of coronavirus counts across much of the country will derail efforts to reopen businesses shut down due to the pandemic.
The yield on the 10-year Treasury was little changed at 0.61% early Tuesday.
In the commodities markets, the price of benchmark U.S oil was up 3.9% to $42.40 a barrel. Brent crude oil, the international standard, was up 3.5% to $44.81 a barrel.
Stocks in Europe rose broadly after the 27 leaders of European Union countries agreed to a 1.8 trillion-euro ($2.1 trillion) budget and coronavirus recovery fund after one of their longest summits. To cope with the biggest recession in its history, the EU will establish a 750 billion-euro ($858 billion) coronavirus fund, partly based on common borrowing, to be sent as loans and grants to the hardest-hit countries.
That is in addition to the agreement on the seven-year, 1 trillion-euro ($1.14 trillion) EU budget that leaders were haggling over even before the pandemic.
Germany’s DAX jumped 1.4%, putting it in positive territory for the year after a massive plunge during the pandemic.
France’s CAC 40 added 0.8%, and Britain’s FTSE 100 climbed 0.4%. Asian markets closed broadly higher.
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