US stocks make biggest leap since March on China stimulus

NEW YORK (AP) — U.S. stocks surged to their biggest gain in two months on Tuesday after the Chinese government moved to stimulate the world's second-largest economy. That gave a big boost to energy, chemicals and machinery companies. For months investors have worried about the state of China's...

              FILE - In this Tuesday, Sept. 8, 2015, file photo, a Wall Street street sign is framed by an American flag hanging on the facade of the New York Stock Exchange. Global stocks rose Tuesday, May 10, 2016, after a promise of stimulus from China helped to counter pessimism over weak trade data from the country, while oil prices stabilized after sharp losses. (AP Photo/Mary Altaffer, File)

NEW YORK (AP) — U.S. stocks surged to their biggest gain in two months on Tuesday after the Chinese government moved to stimulate the world's second-largest economy. That gave a big boost to energy, chemicals and machinery companies.

For months investors have worried about the state of China's economy, which is slowing down after a quarter-century of rapid growth. The prospect of greater sales to China lifted companies that make basic building materials, chemicals, building and mining equipment, and aircraft. The price of oil matched a six-month high and companies that drill for oil and refine it also rose. All 10 industrial sectors of the Standard & Poor's 500 index finished higher.

Investors have been taking money out of stocks lately, said Bob Doll, chief equity strategist and senior portfolio manager at Nuveen Asset Management. He said they were glad to see China's government do something about its economy.

"It's just another small step on the way of China attempting to address the issue," he said. "This is a ray of sunshine which is needed."

The Dow Jones industrial average jumped 222.44 points, or 1.3 percent, to 17,928.35. The Standard & Poor's 500 gained 25.70 points, or 1.3 percent, to 2,084.39. The Nasdaq composite index rose 59.67 points, or 1.3 percent, to 4,809.88.

Stocks overseas traded mostly higher after 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 job losses. The moves include more bank lending, greater tax rebates, and support for export credits.

General Electric picked up 61 cents, or 2 percent, to $30.48 and aerospace giant Boeing rose $2.62, or 2 percent, to $134.72. Companies that make chemicals and other basic materials also rose. Dow Chemical gained 70 cents, or 1.4 percent, to $51.54 and Martin Marietta Materials rose $5.60, or 3.1 percent, to $187.85.

U.S. crude rose $1.22, or 2.8 percent, to $44.66 a barrel in New York. Brent crude, the benchmark for international oil prices, gained $1.89, or 4.3 percent, to $45.52 a barrel in London. That canceled out losses for oil on Monday, and U.S. crude matched its highest price in six months.

Among energy companies, Exxon Mobil added $1.42, or 1.6 percent, to $89.99 and Hess climbed $3.24, or 5.9 percent, to $57.71.

Economic news from the U.S. was mixed. The Labor Department said job openings in March rose by the largest amount in eight months, but total hiring slowed down. The agency said job openings grew 2.7 percent to about 5.8 million. However the slower pace of hiring suggests employers were more reluctant to fill open positions as the economy grew at a slow pace.

Amazon reached an all-time high after it launched a self-publishing video platform called Video Direct. The move could make money for Amazon and budding filmmakers in the same way YouTube has created a community of online celebrities. Amazon climbed $23.50, or 3.5 percent, to $703.25.

International Flavors & Fragrances, which makes ingredients for the food, cosmetics and consumer products industries, climbed to an all-time high after it reported strong results for the first quarter. The stock rose $6.35, or 5.3 percent, to $126.24.

Allergan, 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. That sale is expected to close later this year. The stock jumped $11.29, or 5.3 percent, to $225 and is up 12 percent this week.

Retailer Gap reported April sales that 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 $2.51, or 11.5 percent, to $19.30 and set its lowest price since early 2012.

SolarCity reported a larger first-quarter loss than Wall Street expected and cut its annual projections. The solar panel installer said bookings aren't as strong as it expected and regulations held back its business. The stock shed $4.69, or 20.8 percent, to $17.82.

Stocks overseas mostly traded higher. Japan's benchmark Nikkei 225 added 2.2 percent as the yen weakened, a boon for the nation's exporters. The dollar rose to 109.30 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.

South Korea's Kospi added 0.8 percent and the Shanghai Composite was little changed. Germany's DAX and Britain's FTSE 100 both gained 0.7 percent and the CAC 40 in France added 0.4 percent.

Bond yields were stable and the yield on the 10-year U.S. Treasury note stayed at 1.75 percent. The euro declined to $1.1370 from $1.1389.

In other energy trading, wholesale gasoline gained 4 cents, or 3 percent, to $1.49 a gallon. Heating oil rose 5 cents, or 4 percent, to $1.34 a gallon. Natural gas rose 6 cents, or 2.9 percent, to $2.16 per 1,000 cubic feet.

Metals prices were little changed. Gold fell $1.80 to $1,264.80 an ounce. Silver held steady at $17.09 an ounce. Copper fell 1 cent to $2.09 a pound.


AP Markets Writer Marley Jay can be reached at His work can be found at