US stocks rebound as anxiety over British vote eases

 

U.S. stock indexes moved higher in morning trading Tuesday as investors welcomed encouraging data on the economy and housing. The rebound followed even bigger gains in Europe as global markets recovered from a two-day rout triggered by Britain’s vote to leave the European Union.

Energy and health care companies led the rally. Consumer and technology stocks also notched gains. Banks and other financial companies, which took the heaviest losses in the sell-off, also rose. Energy companies headed higher as the price of crude oil rose. Bond prices fell, sending yields higher.

The Dow Jones industrial average gained 116 points, or 0.7 percent, to 17,256 as of 11:27 a.m. Eastern Time. The Standard & Poor’s 500 index rose 16 points, or 0.8 percent, to 2,017. The Nasdaq composite added 58 points, or 1.3 percent, to 4,652.

European benchmarks rose. Britain’s FTSE 100 gained 2.8 percent and France’s CAC 40 climbed 2.8 percent. Germany’s DAX gained 2.1 percent.

The euro and the British pound were moving higher, though the pound remained near its lowest levels since 1985.

Uncertainty and anxiety over the economic fallout from Britain’s vote to leave the European Union has roiled global financial markets since Friday and prompted ratings agencies to slash their top-shelf credit rating for the U.K.

Investors appeared to shake off their some of their jitters ahead of Tuesday’s meeting between British Prime Minister David Cameron and his European Union counterparts. Cameron has signaled he might not trigger a clause setting in motion the U.K.’s exit from the EU before October.

In the U.S., a new batch of economic data helped put traders in a buying mood.

The Commerce Department raised its estimate of U.S. economic growth in the first three months of the year. Separately, a key gauge of home values showed U.S. home prices climbed in April, hitting record highs in several cities. In addition, the Conference Board said its measure of U.S. consumer confidence increased this month to the highest level since October.

“Obviously, the market isn’t very receptive to uncertainty, but in some ways this uncertainty is providing the possibility and the consideration that what happened in the U.K. isn’t necessarily reflective of, or an indicator of, a recession, especially here in the U.S. as well as globally,” said W. Janet Dougherty, a global investment specialist at J.P. Morgan Private Bank.

Southwestern Energy was the biggest gainer in the S&P 500 index, climbing 87 cents, or 7 percent, to $13.29. Several other energy companies also rose. Devon Energy added $1.75, or 5.2 percent, to $35.50, while Cabot Oil & Gas gained $1.22, or 5.1 percent, to $25.28.

Data storage companies Western Digital and Seagate Technology also rebounded a day after posting big losses. Western Digital added $1.42, or 3.4 percent, to $43.61, while Seagate rose $1.02, or 4.9 percent, to $21.89.

Earlier in Asia, markets bounced back from early losses as leaders signaled they were ready to step in with support policies. Japan’s benchmark Nikkei 225 index climbed 0.1 percent, while South Korea’s Kospi added 0.5 percent.

Hong Kong’s Hang Seng Index was a laggard, losing 0.3 percent. It was dragged down by companies with high exposure to Europe, such as billionaire tycoon’s Li Ka-shing’s CK Hutchison Holdings, which has British retail, ports and telecom investments and fell 1.7 percent.

“When you pull a spring, after you let it go it oscillates up and down for a little while and that’s still what we’re seeing in the markets,” said Andrew Sullivan, a sales trader at Haitong Securities. “This is nothing about individual companies per se, this is about the effect of forex on their earnings.”

In currency markets, the pound recovered to $1.3322 from $1.3176 on Monday. The yen eased slightly against the dollar, though it was still hovering near its strongest level in two years. The dollar rose to 102.71 yen from 101.97 yen. The euro strengthened to $1.1046 from $1.1005.

Benchmark U.S. crude rebounded 73 cents, or 1.6 percent, to $47.06 a barrel in New York. Brent crude, used to price international oils, rose 50 cents, or 1.1 percent, to $47.67 a barrel in London.

Bond prices fell. The yield on the 10-year Treasury note rose to 1.45 percent from 1.44 late Monday.

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