On 6 April, 2015 – US shares rally on higher energy prices

Stocks were mixed in thin trading with many markets closed in the Asia Pacific region and in Europe.
United States
US stocks rose as energy shares rallied with the price of crude. Contributing to the rally was speculation the Federal Reserve will hold borrowing costs lower for longer after April 3’s weaker-than-forecast employment data. Energy shares surged and West Texas Intermediate crude prices jumped after Saudi Arabia raised prices for shipments to Asia, its biggest regional market. The Dow Jones industrials and S&P both were up 0.7% while the Nasdaq added 0.6%.
The stock market was closed Friday when the Labor Department reported that employers added just 126,000 workers to their payrolls in March, the smallest increase since December 2013. The report was another sign of weaker economic growth in the winter months and added more pressure on the Federal Reserve to put off raising interest rates.
New York Fed President William Dudley said the pace of rate increases is likely to be “shallow” once the Fed starts to tighten. His comments were the first from the inner core of the Fed’s leadership since a government report showed payrolls expanded less than forecast in March. While data signaling rates near zero for longer have previously been welcomed by American equity investors, concern is building that economic weakness will worsen the outlook for corporate profits. The timing of the first interest rate increase since 2006 “will be data dependent and remains uncertain because the future evolution of the economy cannot be fully anticipated,” Dudley said Monday. “It will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate.”
A jump in the price of crude oil helped send Chevron, Exxon Mobil and other energy giants up on Monday. Ventas announced plans to buy Ardent Medical Services, a privately owned hospital chain, for US$1.75 billion and spin off most of its skilled nursing facilities. Ventas, an investment trust focused on health care, surged on the day. The planned merger between Hudson City Bancorp and M&T Bank has run into another delay. Hudson City said the Federal Reserve won’t sign off on the deal before April 30, a deadline for the merger to move ahead. Hudson City Bancorp and M&T Bank both retreated.
There was no gold fixing on Monday, April 6 because of the Easter Monday holiday. Copper futures were down 0.8% to US$2.71. WTI spot crude was up US$2.81 to US$51.95. Dated Brent spot crude was up US$2.88 to US$57.83. The US dollar was mixed against its major counterparts. The Dollar Index was up 0.5%. The yield on US Treasury 30 year bond was up 3 basis points to 2.56% while the yield on the 10 year note lost 1 basis point to 1.90%.
Europe
Markets were closed for the Easter Monday holiday.
Asia Pacific
Stocks were mixed in holiday thinned trading Monday as most markets across the region remained closed for holidays. While Japanese shares retreated slightly due to a firmer yen, other markets managed to post modest gains amid speculation the US Federal Reserve would not increase interest rates anytime soon. While markets in Australia and New Zealand remained closed for the Easter Monday holiday, the Chinese, Taiwanese and Hong Kong markets were shut for the Ching Ming Festival.
The Nikkei slipped 0.2% on the weaker than expected US non-farm payroll employment report that sent the yen higher against the dollar as concerns about US growth threated the outlook for interest-rate increases. Exporters were mixed with Nikon, Suzuki Motor, Fanuc, Mazda Motor and Toyota Motor declining while Canon and Honda Motor advanced. Sharp soared on a report the troubled electronics company is moving to spin off its LCD panel business and seeking funding for it from a government supported investment fund. Sony gained on a Nikkei report that it plans to cut more than half of its management level workers. Regional lender Tomony Holdings rallied after saying it is in talks to merge with Osaka-based Taisho Bank. Mitsubishi UFJ Financial,
The Kospi was virtually unchanged (up 1.01 point) as investors adopted a cautious stance ahead of the first quarter earnings season. While Samsung Electronics advanced before releasing its first quarter guidance Tuesday, Hyundai Motor and Kia Motors declined. The Sensex added 0.9% ahead of the Reserve Bank of India monetary policy meeting. The RBI is expected to maintain the status quo on the benchmark interest rate after an unexpected rate cut on March 4.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
The Reserve Banks of Australia and India announce their respective monetary policy decisions. Australia posts February retail sales. March composite PMIs will be posted for the Eurozone, France and Germany. Services PMIs will be reported in the UK. The Eurozone releases February producer prices. Global composite and services PMIs will be reported. In the US, February JOLTS and consumer credit will be released.
*Note — all releases are listed in local time.
Anne D PickerChief EconomistEconoday