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U.S. markets open on upswing as global stocks rally After woozy ride, U.S. stocks pull out first week of gains of the year
(about 5 hours later)
U.S. stocks opened on an upswing Friday following a global rebound in equities led by hopes for more monetary stimulus in Europe and Asia and a bounceback in oil prices from 12-year lows. U.S. stocks recovered some ground on Friday following a tumultuous week that ended with a bounceback in oil prices and hopes for further global economic stimulus.
Energy companies dominated the gains, with shares of pipeline company Williams Cos. up more than 15 percent. The tech-heavy Nasdaq Composite climbed 1.9 percent in the first 90 minutes of trading, while the Standard & Poor’s 500-stock index rose 1.52 percent and the Dow Jones industrial average was up 170 points, or 1.1 percent. All three major indices ended the week higher than they began, marking the first week of gains so far this year. The tech-heavy Nasdaq Composite climbed 2.66 percent on Friday, while the Standard & Poor’s 500-stock index rose 2.03 percent and the Dow Jones industrial average was up 210.83 points, or 1.33 percent.
Japan’s Nikkei led the way overnight with a 5.9 percent jump, while European shares were poised for their largest two-day rise since 2011. The rally follows indications from European Central Bank President Mario Draghi that further support for the economy might be in store at the ECB’s March meeting. There was also speculation that China and Japan may be pushed into further stimulus as signs of global economic weakening grow stronger. Oil prices, meanwhile, climbed back above $32 per barrel after a bruising rout that had pushed them to the lowest levels since the start of the Iraq War. The price of benchmark crude rose 8.43 percent, helping lift the overall stock market.
“For several months now, it’s all been about oil prices,” said Torsten Slok, chief international economist at Deutsche Bank. “That’s driving everything.”
Indeed, energy companies dominated the gains, with shares of pipeline company Williams Cos. up more than 23 percent.
Markets in Asia and Europe also staged a comeback. Japan’s Nikkei led the way overnight with a 5.9 percent jump, while European shares registered their largest two-day rise since 2011. The rally follows indications from European Central Bank President Mario Draghi that further support for the economy might be in store at the ECB’s March meeting. There was also speculation China and Japan may be pushed into further stimulus as signs of global economic weakness mount.
[Feeling a little jumpy about the markets? Here’s what’s going on.][Feeling a little jumpy about the markets? Here’s what’s going on.]
Oil prices climbed back above $31 per barrel after a bruising rout that had pushed them to the lowest levels since the start of the Iraq War.
The stronger tone caps a holiday-shortened but volatile week on Wall Street as investors awaited gross domestic product data out of China and were taken aback by sharp cuts in the International Monetary Fund’s international growth forecasts. Combined with the rapid decline in energy markets that has sparked concerns about corporate bankruptcies in the sector, it all culminated in an especially rocky trading session Wednesday.The stronger tone caps a holiday-shortened but volatile week on Wall Street as investors awaited gross domestic product data out of China and were taken aback by sharp cuts in the International Monetary Fund’s international growth forecasts. Combined with the rapid decline in energy markets that has sparked concerns about corporate bankruptcies in the sector, it all culminated in an especially rocky trading session Wednesday.
[The do’s and don’ts of a market crash]
Moody’s Investors Service is reviewing ratings of energy companies hit by low prices. Schlumberger announced it would cut 10,000 jobs as the oil rout left it with a $1 billion quarterly loss.Moody’s Investors Service is reviewing ratings of energy companies hit by low prices. Schlumberger announced it would cut 10,000 jobs as the oil rout left it with a $1 billion quarterly loss.
[The do’s and don’ts of a market crash]
Globally, stocks have lost $7.8 trillion in value so far this year, according to Bloomberg calculations, making it one of the worst yearly starts in history.Globally, stocks have lost $7.8 trillion in value so far this year, according to Bloomberg calculations, making it one of the worst yearly starts in history.
But analysts said they were hopeful the rough start to the year was not an omen of things to come.
“It does look like the worst might be behind us,” said Scott Brown, chief economist at Raymond James. “A lot of the fears have softened, even though I don’t think they’ve gone away entirely.”
Investors’ focus will again turn to the domestic economy next week as the United States releases fourth GDP figures expected to show a meager annual rise of 0.7 percent, according to forecasts from the Atlanta Federal Reserve.
Wall Street will also be looking to the Federal Reserve’s policy meeting on Wednesday for clues on where the domestic economy may be headed. The Fed raised interest rates for the first time in nearly a decade last month, but the recent round of weak overseas economic figures and rickety global markets have fueled speculation it may not adjust rates again until at least this summer.