New York: US stocks shot up nearly 2% on Thursday as China’s confirmation of strong export data eased recovery concerns and helped spur the euro’s climb.
The market rebounded from a late sell-off on Wednesday, led by a sharp drop in BP and other energy shares.
China confirmed that exports jumped 50% in May from a year ago, reassuring investors about the global economy in the face of the euro zone debt crisis, and pushing energy and materials stocks higher.
“Since Europe is China’s biggest export destination, this data suggests that there’s more resilience to the global rebound than we had been thinking,” said Douglas Peta, an independent market strategist in New York.
Energy shares gave one of the biggest boosts to the market, with the S&P energy sector up 3.4%, making it the top percentage gainer among S&P sectors. July US crude futures rose 1.6%, or $1.21, to $75.59 a barrel following the Chinese data and after the International Energy Administration raised its estimate for oil demand growth in 2010.
Chevron Corp provided the Dow with one of its major boosts, rising 3.3% to $73.14.
US-listed shares of BP Plc climbed 7.7% to $31.45. The stock, the second most active on the New York Stock Exchange, rebounded from Wednesday’s steep sell-off where the ADR hit a multi-year low on concerns about how the company will cope with the costs of the oil spill in the Gulf of Mexico.
The PHLX Oil Service Sector index jumped 4.2%, with Baker Hughes Inc up 7.7% at $41.29 and Halliburton Co up 5.5% at $23.79.
The Dow Jones industrial average was up 174.88 points, or 1.77%, at 10,074.13. The Standard & Poor’s 500 Index was up 18.75 points, or 1.78%, at 1,074.44. The Nasdaq Composite Index was up 32.91 points, or 1.52%, at 2,191.76.
Earlier, the Dow hit an intraday high at 10,150.76, up as much as 2.54% for the day, while the S&P 500 reached an intraday high at 1,083.20, reflecting a gain of as much as 2.61% for day. The Nasdaq advanced to an intraday high at 2,207.12, up as much as 2.21% for the day.
Reflecting the broad rally, only six stocks in the S&P 500 index were in negative territory, while the index itself hit a bullish technical alert on Thursday as the moving average convergence divergence, a widely followed momentum indicator known as the MACD, generated a “buy” signal.
In Wednesday’s trading, the US stock market also enjoyed a strong rally though late-day concerns about BP pushed the three major indexes into negative territory at the close.
“The markets consistently fail to hold intraday gains, which suggests there isn’t much confidence in the buying,” Peta said.
Earlier in the week, the Dow and the S&P 500 posted two consecutive days of moves greater than 1%, a reminder that volatility hasn’t gone away.
At midday on Thursday, the CBOE Volatility Index or VIX, was down 7.2% at 31.31.
The euro advanced more than 1% against the dollar as strong demand in a Spanish bond auction eased concerns about how the country will fund its large debt and in response to the Chinese data.
US stocks have been closely tied to the euro’s movement as investors use the currency as a barometer for confidence in the euro zone economy.
Before the opening bell, the government reported that the number of US workers filing new unemployment claims fell less than expected last week, while the international trade deficit widened slightly in April, pointing to a moderate economic recovery.