NEW YORK: US stocks rose on Monday (Feb 2) following sharp swings that shook financial markets overnight, including tumbles for Asian stocks. Gold and silver prices sank further following their latest wild moves.
On Wall Street, the S&P 500 added 0.5 per cent and snapped a three-day losing streak. The Dow Jones Industrial Average rose 515 points, or 1.1 per cent, and the Nasdaq composite gained 0.6 per cent.
Stocks of companies that make computer storage helped lead the market, adding to gains from last week following several profit reports that topped analysts’ expectations. Airlines and cruise-ship operators were also strong, benefiting from a sharp easing of oil prices.
The centre of action in financial markets was again precious metals, where momentum has suddenly halted after gold’s price roughly doubled in just 12 months.
Gold briefly dropped below US$4,500 per ounce in the overnight hours, down more than US$1,000 from its high point reached just last week. It then climbed back above US$4,800 before settling at US$4,652.60, down 1.9 per cent from Friday.
Silver’s price has been on an even wilder ride recently, and it swung from a 9 per cent loss overnight to a modest gain and back to a loss of 1.9 per cent.
Gold and silver prices had surged as investors looked for safer things to own amid a wide range of worries, including a Federal Reserve that may be set to become less independent, a US stock market that critics say is expensive, threats of tariffs and heavy debt loads for governments worldwide.
Their prices cratered on Friday, including a 31.4 per cent plunge for silver. Some on Wall Street saw it as a result of President Donald Trump’s nomination of Kevin Warsh as the next chair of the Fed. Warsh’s reputation as a former Fed governor may have raised expectations that he may keep interest rates high to fight inflation, which would reduce the need to hide out in gold and silver for protection.