U.S. stocks extended Monday’s gains on Tuesday amid a rally in the energy sector. Investors’ focus shifted towards more earnings reports as they debate whether the market is primed for an end-of-the-year rally. At the same time, recent data has shown that care sales have hit a new record, most likely due to declining gasoline prices driving demand higher. The Dow Jones Industrial Average gained 89.39 points, or 0.5%, to trade at 17,918.15 as Visa Inc (N:V) and Chevron (N:CVX) each rise around 3.5%. Exxon Mobil (N:XOM) added 1.84%. The Nasdaq Composite rebounded from early-session declines to gain 17.98 points, or 0.35%, to trade at 5,145.13. The S&P 500 index added 5.74 points, or 0.27%, to close at 2,109.79 as the energy sector lead gains among components. The energy sector, which is this year’s worst performing sector, has risen 2.5%. Among the top gainers were Diamond Offshore Drilling (N:DO) and Pioneer Natural Resources Company (N:PXD), rising 6.33% and 6.62%, respectively.
Following Wall Street’s lead, Asian stock markets surged in early Wednesday trading, prompting predictions that the European markets will follow as well. Shanghai stocks added 2.6% after President Xi Jinping commented on possible reforms to the markets over the next five years. He stated that he believes a 7% growth can be sustained over the next few years, although uncertainties such as muted global trading and debt are possible. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.7%. Hong Kong shares rose 3% and the Japanese Nikkei 225 added 2.4% as three companies connected with Japan Post have made impressive trading debuts as part of the company’s IPO.
In currencies, higher U.S. debt yields lifted the dollar, which has rise 0.1% against the yen to 121.16 yen. The euro moved 0.1% lower to trade at $1.0952 as the common currency extended its overnight losses. Recent comments made by European Central Bank President Mario Draghi on Tuesday have shown the central bank’s willingness to act in case the euro is weighed down too strongly. This, however, could be at odds with the ECB’s plan to further expand its current stimulus programs.
This week’s upcoming economic data releases continue with ADP’s initial U.S. unemployment survey, ahead of the official nonfarm payrolls report on Friday. U.S. balance of trade will be released later on Wednesday, followed by a number of data releases from the Bank of England on Thursday, including inflation and an interest rate decision. U.S. nonfarm payrolls will be released on Friday, followed by U.S. and Canadian unemployment numbers later in the session.