US stock prices jumped yesterday, following the path of equities in Europe, as investors breathed easier over the crisis in Ukraine and knocked oil prices to lows not seen in more than a year.
US bond prices dropped and the dollar rose after dipping on Friday, when the government in Kiev said its artillery had hit a Russian armored column. Russia denied its forces had crossed into Ukraine.
On Wall Street, an $8.95 billion bid by discount retailer Dollar General Corp for Family Dollar Inc that trumped a bid by Dollar Tree Inc also helped prices.
The Dow Jones industrial average rose 175.7 points, or 1.05 per cent, to 16,838.61, the S&P 500 gained 16.79 points, or 0.86 per cent, to 1,971.85, and the Nasdaq Composite added 42.20 points, or 0.95 per cent, to 4,507.13.
“People left Friday unsure of whether or not the Ukrainian conflict was escalating and they seem to have come back today thinking it’s not,” said Rick Meckler, president of LibertyView Capital Management in Jersey City,New Jersey.
In Europe, the pan-European FTSEurofirst 300 index rose 1.2 per cent. German blue chips, which are considered especially vulnerable to tensions between the West and Russia, were among the top gainers.
Oil fell below $102 a barrel as investor concerns over both the conflicts in Ukraine and Iraq eased and as higher Libyan oil output added to already ample supplies.
Brent crude was off $2.16 to $101.37 a barrel by 11:46 a.m. (1546 GMT) after falling as low as $101.11, the lowest level since June 2013. US crude for September fell $1.28 to $96.07, after touching a low of $95.81.
The market was a little bit concerned things could flare up in Ukraine
US Treasury debt prices fell after three days of gains last week. Risk appetite grew on upbeat US housing data and the easing tensions in the Middle East and Ukraine. The NAHB/Wells Fargo Housing Market index, which measures homebuilder sentiment, rose for a third straight month in August.
US 10-year note prices fell 12/32 to yield 2.387 per cent, from 2.339 per cent late on Friday. US 30-year bond prices also slid, dropping 1-3/32 to yield 3.191 per cent, from 3.129 per cent the previous session
Yields on German 10-year debt, the euro zone benchmark, rose 2.6 basis points to a shade above 1.001 per cent.
As equities rose, gold slipped below $1,300 an ounce and was last trading at $1,298.
In currency markets, the dollar index, which measures the greenback against six major currencies, was up 0.18 per cent.
“The market was a little bit concerned that things could flare up in the Ukraine region over the weekend, and the fact that they haven’t has made the market relax a little bit,” said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.