Oil jump fuels stock rally; EU shake-up fears rock currencies

Mon Feb 22, 2016 4:24pm EST
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By Lewis Krauskopf

NEW YORK (Reuters) - Global stocks rallied on Monday, backed by a rise in oil and commodity prices, while the British pound suffered its biggest one-day loss in nearly six years against the dollar on fears Britain would leave the European Union.

Sterling tumbled to a near seven-year low during the session after popular London Mayor Boris Johnson said he would campaign to leave the EU ahead of a June 23 referendum. The euro fell 0.9 percent.

Battered oil prices jumped as speculation about falling U.S. shale output helped feed the notion that crude prices may be bottoming after their 20-month collapse.

Benchmark Brent LCOc1 settled up 5.1 percent to $34.69 a barrel, while U.S. crude settled up 6.2 percent at $31.48 a barrel.

Stocks, whose performance has been tightly linked to oil prices, posted solid gains across major markets.

"It still seems like oil, for whatever reason, continues to be what everything is trading off of," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago. "That’s the signal that the world is OK, that oil prices are going up."

The Dow Jones industrial average .DJI rose 228.67 points, or 1.39 percent, to 16,620.66, the S&P 500 .SPX gained 27.72 points, or 1.45 percent, to 1,945.5 and the Nasdaq Composite .IXIC added 66.18 points, or 1.47 percent, to 4,570.61.

All 10 major S&P sectors were higher, led by a 2.2 percent increase for the energy .SPNY sector.   Continued...

A trader works on the floor of the New York Stock Exchange in the Manhattan borough of New York, February 22, 2016.   REUTERS/Carlo Allegri