NEW YORK -- U.S. stocks climbed Wednesday as investors continued to recover some confidence in the health of the global economy. That sent oil prices higher and gave energy companies a lift, while materials companies also climbed higher.
The Dow Jones industrial average rose 145.46 points, or 0.8 percent, to 17,851.51. The Standard & Poor's 500 index rose 14.48 points, or 0.7 percent, to 2,090.54. The Nasdaq composite index added 33.84 points, or 0.7 percent, to 4,894.89.
Investors "feel confident that perhaps we're seeing a stabilization of growth overseas," said Quincy Krosby, market strategist at Prudential Financial. "Here in the U.S. the economy appears to be pulling out of the first-quarter slump."
In Europe, a round of new rescue loans for Greece was unfrozen, eliminating the risk the country will default on its debts in the next few months. A survey of business sentiment in Germany, the largest economy in Europe, rose more than expected. European stock indexes rose and the U.S. market followed them. Expecting stronger demand for fuel and materials used in industry and construction, investors bought stock in energy, mining and chemicals companies. U.S. stocks had jumped Tuesday after a strong report on new-home sales.
Already at their highest levels since October, oil prices ticked higher after the U.S. government said fuel stockpiles decreased last week. Benchmark U.S. crude gained 94 cents, or 1.9 percent, to $49.56 a barrel in New York. Brent crude, used to price international oils, rose $1.13, or 2.3 percent, to $49.74 a barrel in London.
That sent energy companies higher. Chevron added $1.58, or 1.6 percent, to $101.77, and Schlumberger rose $2.29, or 3 percent, to $77.91.
German conglomerate Bayer said it's committed to completing its acquisition of Monsanto, and the seed company rose $2.38 to $111.68. Monsanto rejected an offer from Bayer worth $62 billion, or $122 per share, but said Tuesday that it's open to talks.
In other deal news, Hewlett Packard Enterprise said it will sell its business service unit to Computer Sciences Corp. for $8.5 billion. The company, which was formed when Hewlett-Packard split in two last year, will focus on selling tech products to big organizations, like hardware and software for data centers. Hewlett Packard Enterprise rose $1.10, or 6.8 percent, to $17.35, and Computer Sciences surged $15, or 42.1 percent, to $50.65.
Bank stocks made some of the biggest gains as investors anticipated that interest rates will rise, allowing banks to make more money on lending. The Federal Reserve has said it wants to keep raising interest rates if the economy is strong enough. Bond prices edged lower on Wednesday, and the yield on the 10-year U.S. Treasury note rose to 1.87 percent from 1.86 percent.
Wells Fargo rose $1.30, or 2.6 percent, to $50.50 and Citigroup added $1.08, or 2.4 percent, to $46.94.
Chinese e-commerce company Alibaba fell after it said U.S. regulators are investigating its accounting practices. The company said the Securities and Exchange Commission has asked for documents and information related to its consolidated earnings and other items. The stock lost $5.53, or 6.8 percent, to $75.59.
Business on 05/26/2016