US stocks surge as investors grow hopeful about British vote


NEW YORK (AP) — Global stocks are climbing Monday as investors grow more hopeful that Britain will remain in the European Union. In the U.S., energy companies are rising with the price of oil. Investors dumped ultra-safe assets like U.S. government bonds, gold and utility stocks, sending those prices lower. Machinery and consumer companies are making some of the largest gains.

KEEPING SCORE: The Dow Jones industrial average climbed 180 points, or 1 percent, to 17,854 as of 3:20 p.m. Eastern time. The Standard & Poor’s 500 index rose 17 points, or 0.9 percent, to 2,089. The Nasdaq composite gained 52 points, or 1.1 percent, to 4,852. The big gains come after the market has mostly slumped over the past two weeks. The S&P 500 and the Nasdaq reached their highest levels of the year on June 8.

BRITISH VOTE: The British pound rose sharply as the latest opinion polls and betting markets suggest it’s more likely Britain will stay in the European Union than leave when citizens vote on the issue Thursday. The pound jumped to $1.4652 from $1.4375. Many expect that a British departure from the economic union would hurt that country’s economy and possibly encourage other countries to leave the EU. Investors have worried about the outcome of the vote in recent weeks. The vote is expected to be close.

ENERGY: Benchmark U.S. crude oil rose $1.39, or 2.9 percent, to $49.37 a barrel in New York. Brent crude, used to price international oils, gained $1.48, or 3 percent, to $50.65 a barrel in London. After a six-day losing streak, oil prices are up about 7 percent over the past two days.

Among energy stocks, Chevron rose $1.60, or 1.6 percent, to $103.17 and EOG Resources picked up $2.28, or 2.8 percent, to $83.17.

CONSUMER CLIMBERS: Consumer stocks rose as investors bet people will spend more on shopping and travel. Amazon gained $12.85, or 1.8 percent, to $719.24 while travel booking site Priceline added $41.21, or 3.1 percent, to $1,350.34 and Nike rose 81 cents, or 1.5 percent, to $54.52.

HEAVY METAL: Machinery companies climbed. General Electric rose 41 cents, or 1.3 percent, to $31.01 while aerospace company Boeing added $3.64, or 2.8 percent, to $133.46 and Honeywell advanced $1.53, or 1.3 percent, to $117.45.

THE QUOTE: Jim McDonald, chief investment strategist at Northern Trust, said Britain’s status within the EU won’t affect U.S. businesses very much, although a ‘leave’ vote would hurt European banks and possibly encourage other countries to back out of the EU, hurting the European economy.

“It’s not the direct effects that people are worried about, it’s the indirect ones,” he said.

TECH GAINS: Software maker Adobe Systems, which will report its second-quarter results Tuesday, jumped $2.91, or 3 percent, to $98.49. EBay rose 93 cents, or 3.9 percent, to $24.72 while chipmaker Intel edged up 58 cents, or 1.8 percent, to $32.35.

BANKS BREAK OUT: Bond prices dropped as investors moved money out of ultra-safe assets. The yield on the 10-year U.S. Treasury note rose to 1.67 percent from 1.61 percent late Friday. That’s an encouraging sign for banks since bond yields are used to set interest rates on many kinds of loans including mortgages, and banks will be able to make more money from lending as rates increase.

Bank of America rose 17 cents, or 1.3 percent, to $13.57 and Wells Fargo, the nation’s biggest mortgage lender, rose 61 cents, or 1.3 percent, to $45.21.

DEAL: JD.com stock jumped after the second-largest e-commerce site in China announced a deal with Wal-Mart as part of a broader tie-up. JD.com will buy Wal-Mart’s Yihaodian marketplace and Wal-Mart’s Sam’s Club China will open a flagship store on JD.com. Wal-Mart will also take a 5 percent stake in JD.com. JD.com jumped $1.12, or 5.6 percent, to $21.25.

SPECIAL DELIVERY: FedEx rose after the federal government moved to dismiss charges against the shipping company. Prosecutors had planned to charge FedEx with knowingly delivering illegal prescription drugs to dealers and addicts, but late Friday the government dropped the case. The trial was set to begin Monday. FedEx jumped $3.02, or 1.9 percent, to $165.27.

OVERSEAS: Britain’s FTSE 100 leaped 3 percent and France’s CAC 40 rose 3.5 percent. Germany’s DAX rocketed 3.4 percent higher. Japan’s benchmark Nikkei 225 index surged 2.3 percent. South Korea’s Kospi climbed 1.4 percent and Hong Kong’s Hang Seng added 1.7 percent.

OTHER ENERGY TRADING: Wholesale gasoline added 8 cents to $1.58 a gallon. Heating oil edged up 5 cents to $1.53 a gallon. Natural gas rose 12 cents to $2.75 per 1,000 cubic feet.

METALS: Gold slipped $2.70 to $1,292.10 an ounce. Silver rose 10 cents to $17.51 an ounce. Copper added 4 cents to $2.09 a pound.

CURRENCIES: The dollar fell to 103.94 yen from 104.23 yen and the euro rose to $1.1318 from $1.1275.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay

comments powered by Disqus