China and Buffett fuel Wall St. rally, oil rebounds

Mon Aug 10, 2015 4:24pm EDT
 
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By Noel Randewich

SAN FRANCISCO (Reuters) - Wall Street surged on Monday after a $37.2 billion deal by Warren Buffett's Berkshire Hathaway and weak Chinese data that boosted hopes for fresh stimulus in the world's No. 2 economy, while oil jumped almost 4 percent.

All three major U.S. stock indices finished more than 1 percent higher after Berkshire Hathaway agreed to buy Precision Castparts, showing investors the M&A boom was alive and well.

Global stock markets also got a lift from hopes that Beijing might take new measures to stimulate the Chinese economy after a report that producer prices in July hit their lowest point since late 2009 and exports tumbled 8.3 percent in the same month.

Expectations of possible restructuring among major shipping firms and in other key sectors helped boost recently battered Chinese stock indices by more than 4 percent.

"It's speculative to take anything away from today's rally. Mostly you see it pronounced in the cyclical sectors ... anything tied to China and the commodities' complex," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

RATE RISE TIMING

The outlook in China contrasted with solid U.S. jobs data on Friday, which bolstered expectations that U.S. interest rates would rise as early as September.   Continued...

 
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, July 21, 2015. REUTERS/Lucas Jackson