Wall St closes higher as oil prices bounce

US stocks were buoyed by gains in the energy sector as oil prices rose, while private jobs data were also upbeat.

Wall Street lifted in early trade as oil prices bounced. Picture: AFP Photo/Timothy A. Clary.

US stocks lifted overnight, buoyed by gains in the energy sector as oil prices rose.

Although European shares had a mixed close as investors worried about the continuing Brexit fallout, the upbeat Wall Street leads look set to buoy the Australian share market this morning, with ASX futures up 24 points at 6.28am (AEST).

The Dow Jones Industrial Average rose 41 points, or 0.2 per cent, to 18355 at the close. The S & P 500 added 0.3 per cent and the Nasdaq Composite climbed 0.4 per cent.

The Dow industrials fell for a seventh straight session yesterday, losing 1.4 per cent over that stretch.

Energy shares in the S & P 500 rose 1.8 per cent overnight (AEST) as US crude gained 3.3 per cent to $US40.83 a barrel. Recent declines in oil prices have weighed on broader equity markets.

Markets got a slight bounce after the ADP employment report showed the US private sector added a slightly better than expected 179,000 jobs in July. Investors are watching data on the US economy closely ahead of tomorrow’s monthly jobs report.

In Europe, the FTSE 100 fell 0.2 per cent, the CAC 40 lost 0.2 per cent and the DAX 30 rose 0.3 per cent. as European bank shares rebounded, following losses in Japan and Hong Kong.

Some investors have also grown sceptical in recent sessions about policy makers’ efforts to boost growth, after Australia and Japan disappointed investors with recent moves to stimulate their economies.

“The post-Brexit rally was founded in part on the idea that global policy makers would come in and aggressively step up liquidity assurances and monetary policy expansions — but the Bank of Japan’s limited action sort of highlights that monetary policy is really on its last legs,” said Viraj Patel, foreign-exchange strategist at ING.

Market participants are now looking to the Bank of England, which concludes its meeting Thursday, to cut interest rates and shore up confidence in the UK economy, after data this week confirmed a slowdown in the aftermath of the UK referendum.

If the bank disappoints, concerns about the ability of central banks to ease further could hit yields globally, Mr Patel said.

In corporate news, shares of American International Group gained 6.9 per cent after the global insurance conglomerate posted an increase in net income after markets closed.

Time Warner rose 3.6 per cent after it said it agreed to buy a 10 per cent stake in streaming-TV service Hulu.

Europe’s banking sector began to bounce back from a torrid start to the week, where it fell over 5 per cent. Shares of HSBC Holdings rose 5.1 per cent after the UK lender said it would spend up to $US2.5 billion in the second half of the year to buy back shares, even as earnings dropped in the first half of the year.

Shares of Société Générale rose 3.7 per cent after the French lender reported a jump in second-quarter profit, while shares in Dutch bank ING Groep added 8.7 per cent after profits beat expectations.

Earlier, Japan’s Nikkei Stock Average fell 1.9 per cent amid disappointment over a stimulus package announced Tuesday, which sent the currency sharply higher against the dollar. The dollar was recently up 0.3 per cent against the yen at Yen101.439.

The Shanghai Composite Index inched up 0.2 per cent. China’s services-sector activity expanded at a slower pace in July, a private gauge showed Wednesday, after hitting an 11-month high the previous month.

“Overall, today’s data serves as a reminder that weaknesses still remain in China’s economy,” said Jing Li, economist at HSBC.

Meanwhile, the upgraded purchasing managers index for the eurozone in July suggests the eurozone’s economic recovery gained some momentum in the weeks following the UK’s vote to exit the European Union.

The euro fell 0.4 per cent against the dollar, however, amid a broader modest rebound in the greenback.

Dow Jones