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US stocks follow European markets higher; Dow +1.2%
[NEW YORK] US stocks surged early Tuesday, rallying with European equity markets following deep losses the last two sessions due to Britain's surprise vote to leave the European Union.
About 30 minutes into trade, the Dow Jones Industrial Average was at 17,348.09, up 1.2 per cent. The broad-based S&P 500 climbed 1.3 per cent to 2,026.12, while the tech-rich Nasdaq Composite Index jumped 1.8 per cent to 4,675.00.
The gains in Europe were even stronger, with markets in London, Paris and Frankfurt all up around three per cent as British Prime Minister David Cameron met with his counterparts from other EU countries in Brussels.
US first-quarter economic growth was revised up to 1.1 per cent from the prior 0.8 per cent estimate, according to the Commerce Department.
Analysts said Tuesday's market bounce was a response to two days of heavy selling that saw global markets lose some US$3 trillion after Britons voted Thursday to exit the 28-nation EU.
"There were outsized reactions in all capital markets following the surprising Brexit vote," said Briefing.com analyst Patrick O'Hare.
"There is a budding belief at this juncture, then, that things got overdone on a short-term basis, so there is some bargain-hunting activity taking place in oversold markets and some profit-taking occurring in overbought markets." Large banks, which have endured two days of bruising losses, posted solid gains. Bank of America rose 3.0 per cent, Citigroup 3.1 per cent and JPMorgan Chase 2.2 per cent.
Energy shares benefited from higher oil prices, with Chevron climbing 1.5 per cent, Anadarko Petroleum 3.0 per cent and Halliburton 2.4 per cent.
Airlines rebounded, with United Continental advancing 2.7 per cent and American Airlines 4.0 per cent. Priceline jumped 3.3 per cent and Hilton Worldwide 1.4 per cent.