US stocks jump on the prospect of new China stimulus

Financial Markets Wall Street

NEW YORK (AP) — U.S. stocks are climbing Tuesday after the Chinese government moved to stimulate its economy. Machinery companies and banks are rising the most, and energy companies are trading higher with the price of oil.

KEEPING SCORE: The Dow Jones industrial average jumped 164 points, or 0.9 percent, to 17,869 as of 11:32 a.m. Eastern time. The Standard & Poor’s 500 added 17 points, or 0.8 percent, to 2,075. The Nasdaq composite index picked up 32 points, or 0.7 percent, to 4,782.

CHINA FACTOR: China’s Cabinet approved measures to boost exports as Beijing struggles to reduce gluts in many industries and reverse an export decline that threatens to cause politically dangerous job losses. The moves include more bank lending, greater tax rebates, and support for export credits.

That also aided machinery and equipment companies. General Electric picked up 40 cents, or 1.3 percent, to $30.27 and aerospace giant Boeing rose $2.33, or 1.8 percent, to $134.43.

ENERGY: U.S. crude rose 78 cents, or 1.8 percent, to $44.22 a barrel in New York. Brent crude, the benchmark for international oil prices, gained $1.35, or 3.1 percent, to $44.9 a barrel in London. U.S. crude fell almost 3 percent Monday and Brent crude sank almost 4 percent.

Among energy companies, Exxon Mobil added 79 cents to $89.36 and Hess climbed $1.88, or 3.5 percent, to $56.35.

The recovery in oil prices also helped bank stocks. The financial sector has struggled this year as investors worried about loans banks made to energy companies, and they’ve done better recently as the price of oil has recovered. JPMorgan Chase rose 84 cents, or 1.4 percent, to $62.05 and Bank of America gained 27 cents, or 2 percent, to $14.26.

ALLERGAN ADVANCES: The maker of Botox and other medicines said it will buy back up to $10 billion in stock with proceeds from sale of its generic drug business, planned for later this year. The stock jumped $9.54, or 4.5 percent, to $223.26 after it rose 6 percent on Monday.

TIMBERRR: Flooring maker Lumber Liquidators Holdings reported a larger loss and weaker revenue than analysts expected, and its stock gave up $1.34, or 4 percent, to $12.11. The company’s sales have fallen for five quarters in the row after some of its Chinese-made laminate flooring was linked to chemicals that can cause cancer.

MIND THE GAP: Retailer Gap reported April sales were far weaker than expected as its recent struggles appeared to get worse. The parent of Gap, Old Navy and Banana Republic forecast a smaller profit than analysts had projected, and Gap said it is considering options for its overseas business. The stock fell $2.82, or 13 percent, to $18.99, and it’s trading at its lowest price since early 2012.

SWEET SMELL OF SUCCESS: International Flavors & Fragrances, which makes ingredients for the food, cosmetics and consumer products industries, climbed $6.52, or 5.4 percent, to $126.41 after it reported strong results for the first quarter.

WORD ON THE STREET: Business information provider Dun & Bradstreet picked up $5.91, or 5.3 percent, to $117.67 after it posted a larger profit than analysts expected.

DEAL-ICIOUS: Milk company Dean Foods disclosed solid first-quarter results and said it bought the ice cream manufacturing and retailing business of Friendly’s Ice Cream for $155 million. Its stock dipped 10 cents to $18.11.

YEN WEAKENS: Japan’s benchmark Nikkei 225 added 2.2 percent as the dollar regained strength, a boon for the nation’s exporters. The dollar rose to 109.11 yen from 108.48 yen. The dollar has been very strong in recent years but has lost a bit of strength compared to the yen in recent months.

OVERSEAS: Germany’s DAX rose 0.6 percent and Britain’s FTSE 100 gained 0.8 percent. The CAC 40 in France added 0.3 percent. South Korea’s Kospi added 0.8 percent and the Shanghai Composite was little changed.

CURRENCIES: Bond yields held steady and the yield on the 10-year U.S. Treasury note remained at 1.75 percent. The euro was little changed at $1.1390 after closing at $1.1389 Monday.

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