While you were sleeping: Stocks rise on US economy, UK leadership decision

Stocks on Wall Street rose with the Standard & Poor’s 500 Index hitting its first record in more than a year.

A better-than-expected US jobs report on Friday was the latest boost to the S&P 500, which has gained more than 16% since falling to a yearly low in February.

Investors have been encouraged by signs of strength in the US economy, a recovery in oil prices and the Federal Reserve’s cautious stance toward raising interest rates.

Markets overseas were bolstered by political events, with the UK market rising 1.4% on the confirmation of Theresa May as the new prime minister and Japanese shares rising 4% after the Abe government tightened its control over the Diet’s upper house.

Dow rises 80 points
On Wall Street, the S&P 500 climbed 0.3% to an all-time high of 2137.16. The Dow Jones Industrial Average rose 80.19 points, or 0.4%, to 18,226.93, within one percentage point of its record finish of 18,312.39.

“The record today is a reasonable response to the fact that the world looks a little better than it did a week ago,” Russ Koesterich, head of asset allocation for BlackRock’s Global Allocation Fund, told the Wall Street Journal.

“But the ability to move higher going forward is going to come down to a better economy and stronger earnings growth.”

The Dow’s rise was led by Boeing, whose shares rose 1.5% after signing off a £3 billion defence deal in the UK on the eve of the Farnborough Airshow, and Goldman Sachs, up 1.2%

Despite the jobs report, bond yields keep falling. The yield on the benchmark 10-year US Treasury note fell to as low as 1.358% before recovering to 1.434%.

Pound, FTSE gain on May choice
European markets rose for the third consecutive session. The Stoxx Europe 600 picked up 1.5% to its highest level since the June 23 Brexit referendum.

The UK Conservative Party’s decision to fast-track Mrs May’s replacement of David Cameron as prime minister sent the FTSE100 up 1.4%, while the pound rose a full cent to $US1.30 soon after Andrea Leadsom dropped her leadership bid.

Japan’s Nikkei Stock Average ended up 4% amid rising hopes for a fresh fiscal stimulus package that would lift the world’s third-largest economy.

The move was the best one-day gain for Japanese stocks since March 2 when the benchmark rose 4.1%.

Elsewhere in Asia, Australia’s S&P/ASX 200 ended up 2%, Korea’s Kospi rose 1.3% and Hong Kong’s Hang Seng Index gained 1.6%. China’s Shanghai Composite Index edged up 0.2%.