Wall Street rises with banks, investors shrug off Italian referendum

Mon Dec 5, 2016 4:39pm EST
 
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By Sinead Carew

NEW YORK (Reuters) - U.S. stocks rose on Monday on strong economic data while currency and bond investors shrugged off Italian Prime Minister Matteo Renzi's resignation, following voters' rejection of his constitutional reforms.

U.S. Treasury yields fell in choppy trading on Monday as investors viewed the dramatic bond market selloff following Donald Trump's surprise U.S. presidential win as overdone.

The Italian referendum stoked worries about Italy's political stability and its banking system but financial markets recovered from an initial fright with stocks and the euro rebounding as fears of an imminent election ebbed. Election results from Austria also helped ease investor jitters.

"It was a neutral day in Europe because neither the far right nor the far left made any headway," said Robert Phipps, director at Per Stirling Capital Management in Austin, Texas.

U.S. stocks rose, led by financials as the S&P's banking subsector .SPXBK erased Friday's losses with a 1.7-percent jump. Banks were lifted by investor bets on a Federal Reserve decision to raise benchmark U.S. interest rates next week as higher rates would help banks, Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Rising oil futures for much of the day helped the S&P 500 energy index .SPNY. Also helping U.S. stocks was data showing U.S. services sector activity hitting a one-year high in November, with a surge in production boosting hiring.

The Dow Jones industrial average .DJI closed up 45.82 points, or 0.24 percent, to 19,216.24, the S&P 500 .SPX had gained 12.76 points, or 0.58 percent, to 2,204.71 and the Nasdaq Composite .IXIC had added 53.24 points, or 1.01 percent, to 5,308.89.

The benchmark U.S. 10-year Treasury note yield US10YT=RR was down 0.5 basis points at 2.385 percent, while the 30-year bond yield US30YT=RR was 1 basis point lower at 3.051 percent.   Continued...

 
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 2, 2016.  REUTERS/Brendan McDermid