By IFCMarkets

US stocks rose on Tuesday as energy shares rebounded after yesterday’s slumping. The Dow Jones Industrial Average rose 102.75 points, or 0.6%, to 17,879.55, posting its 32nd record close this year. The S&P 500 gained 13.11 points, or 0.6%, to 2,066.55, with the health-care sector stocks joining energy to lead gains. Energy shares rallied 1.3 percent for the largest gains among all sectors. Nine of 10 main industries in the S&P 500 advanced. The investor mood was boosted also by positive economic data released Tuesday morning, showing construction spending rose 1.1% in October to a seasonally adjusted annual rate of $971 million, much higher than expected. A separate report from Autodata indicated that November car and light truck sales were second-highest in eight years at seasonally adjusted annual rate of 17.2 million, up from 16.5 million in October and the best level since August. Shares in General Motors Co. and Ford Motor Co. rose 1% and 0.8% respectively. Fed Vice Chairman Stanley Fischer and New York Fed President William C. Dudley highlighted yesterday the positive economic impact from the decline in oil prices. Stanley Fischer said continued labor market improvement and “some signs” that inflation is beginning to stir would be enough for the US central bank to start to raise interest rates.

Increasing share prices for energy companies drove European markets higher. On Tuesday, shares of oil and gas firm Afren PLC jumped 13% . Also, shares of BG Group PLC climbed 3% and Royal Dutch Shell PLC gained 2%. The Stoxx Europe 600 gained 0.9% to 348.62. Euro zone factory prices declined by 0.4 percent from September against a 0.3 percent forecast, their sharpest monthly drop in a year. This adds pressure on the European Central Bank to do more to lift the bloc’s depressed economy. Stock markets in Asia rose also. The HSBC/Markit Services Purchasing Managers’ Index (PMI) for China rose to 53.0 last month from October’s 52.9, indicating China’s services sector grew marginally faster in November in contrast to manufacturing PMIs released a day ago recording declining growth in factories in November. Hong Kong and Shanghai stocks made strong advances early Wednesday amid expectations of further monetary easing policy measures by Chinese authorities. Japanese stocks advanced early Wednesday morning, heading into a possible fourth straight day of gains, helped by US stock market advance, solid auto-sales data and a weaker yen.

Brent for January settlement gained as much as 92 cents to $71.46 a barrel on the London-based ICE Futures Europe exchange and was at $71.06 at 12:36 p.m. Singapore time. Iraq, OPEC’s second-largest producer, reached a deal with Kurdish authorities to export oil through Turkey. It will ship as much as 550,000 barrels a day from northern Iraq to the Mediterranean port of Ceyhan adding to global supply surplus. At an event in London yesterday Saudi Arabia’s former intelligence chief Al-Faisal said the kingdom will consider reducing output if there’s “reasonably guaranteed oversight” of quotas and market share isn’t lost to other suppliers.

Gold and precious metals fell as the ICE US Dollar Index rose 0.8% to 88.64. A strong dollar makes dollar-denominated commodities like gold more expensive for holders of other currencies. Gold for February delivery fell 1.5%, to settle at $1,199.40 an ounce. Global disinflation and rising equity markets set the stage for bearish trend for safe haven assets.

Market Analysis provided by IFCMarkets