NEW YORK: Crude oil and global stocks rose on Monday, with a number of major indices setting 2009 highs, on fresh signs that the US economy is pulling out of recession and optimism over a rescue package for lender CIT.
The dollar weakened broadly, slipping to a six-week low against the euro, as investors jumped back into riskier assets amid further solid second-quarter US earnings.
The price of US and euro zone government debt mostly fell as demand for safe-haven assets slid, while copper hit a nine-month high and gold rose more than 1 percent on a weaker dollar and improving economic sentiment.
An index gauging the US economy’s prospects increased for a third straight month in June, suggesting the recession was drawing to a close, the New York-based Conference Board said.
The index of leading economic indicators, which is supposed to forecast economic trends six to nine months ahead, rose 0.7 percent in June following a revised 1.3 percent gain in May.
Asian stocks outside of Japan rose to their highest since world stocks plunged following Lehman Brothers’ collapse last September. Global stocks, as measured by MSCI’s all-country world index, rose to a new 2009 high as did MSCI’s measures for emerging markets, and the tech-rich Nasdaq in the United States also set a 2009 high.
The FTSE 100 index closed up 1.3 percent at 4,443.62, while the FTSEurofirst 300 index of top European shares rose 1.2 percent to 881.19, its highest close since June 12. Helping lift US and European shares was news that lender CIT Group Inc has agreed a $3 billion rescue with bondholders, a person close to the matter said.
At 1 p.m., the Dow Jones Industrial Average was up 59.32 points, or 0.68 percent, at 8,803.26. The Standard & Poor’s 500 Index was up 6.11 points, or 0.65 percent, at 946.49. The Nasdaq Composite Index was up 14.87 points, or 0.79 percent, at 1,901.48.
Oil rose on optimism about a potential global economic recovery and expectations of a turnaround in fuel demand. US light sweet crude oil rose 40 cents to $63.96 a barrel. Brent crude rose 84 cents to $66.22 a barrel.
The euro rose as high as $1.4249, according to Reuters data, its strongest since early June and the yen was under broad pressure.
The dollar was down against a basket of major currencies, with the US Dollar Index down 0.58 percent at 78.887. The euro was up 0.94 percent at $1.4229, and against the yen, the dollar was up 0.18 percent at 94.34.
The benchmark 10-year US Treasury note was up 12/32 in price to yield 3.61 percent. The 2-year US Treasury note was up 1/32 to yield 0.99 percent.
Spot gold prices rose $14.00 to $950.70 an ounce.
The MSCI index of Asia Pacific stocks outside Japan rose 2.9 percent to its highest since Sept. 29. Japan’s markets were shut for a public holiday.