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Overnight Markets: U.S. stocks rise amid optimism on budget
Financial, energy and technology sectors gained the most, as Obama's most recent proposal to Republicans offered concessions on taxes and social programmes spending.
Wall Street gained on Tuesday, with the Standard & Poor’s 500 Index registering its highest level in two months, on hopes President Barack Obama and Republicans will reach to an agreement on a new budget in Washington.
The Dow Jones industrial average rose 116 points, or 0.87%, to 13,351 at the close. The S&P 500 gained 16 points, or 1.15%, to 1,447. The Nasdaq Composite added 44 points, or 1.46%, to 3,055.
President Obama's most recent proposal to Republicans offered concessions on taxes and social programmes spending. House Speaker John Boehner said the proposal is "not there yet", though he remained hopeful about an agreement.
Financial, energy and technology sectors gained the most. Banking stocks surged, as traders bet on a greater demand for loans and a steepening of the yield curve. Bank of America advanced 3.3% and Morgan Stanley rose 3.2%.
In the technology sector, Apple was up 2.9% after losing nearly 13% in the last two weeks. Samsung Electronics Co. said yesterday that it will withdraw patent lawsuits targeting Apple’s use of its technology in European countries.
Arbitron Inc surged 23.6% after Nielsen Holdings NV agreed to purchase the media and marketing research firm in a deal worth $1.26 billion. Nielsen rose 4.4%.
Homebuilders also rose as confidence among U.S. homebuilders climbed in December to the highest in more than six years. Lennar Corp. climbed 2.4%, D.R. Horton Inc. added 2% and PulteGroup Inc. gained 3.2%.
Shares of firearm makers plunged in the aftermath of a school shooting in Newtown, Connecticut, on Friday that killed 20 young children and six adults. Smith and Wesson shed 10%, while Sturm Ruger and Co slid 7.7%.
Private equity firm Cerberus Capital Management said it would offload gunmaker Freedom Group, whose Bushmaster AR-15 rifle was used in the Connecticut massacre.
In Asia, shares gained on Wednesday in morning trade amid hopes U.S. policy makers will reach a budget deal and the Bank of Japan will add to economic stimulus.
The MSCI Asia Pacific Index gained 0.6 percent to 128.72 as of 10:59 a.m. in Tokyo. The Nikkei 225 advanced 1.2 percent to 10,040.10.
Australia’s S&P/ASX 200 rose 0.2% and New Zealand’s NZX 50 Index increased 0.9%. South Korea’s Kospi Index advanced 0.5%. China’s Shanghai Composite Index dropped 0.3%, while Hong Kong’s Hang Seng Index added 0.3%.
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by Gavin Lumsden on Jul 22, 2016 at 16:24