NEW YORK (AP) — U.S. stocks are climbing Wednesday morning, recovering most of the ground they lost the day before, as investors hope Italy might be able to avoid a new round of elections. Banks are rising along with bond yields after outsize losses a day ago and energy companies are breaking out of a five-day losing streak as oil prices rise. Smaller companies are surging after they suffered only modest losses the day before.
KEEPING SCORE: The S&P 500 index gained 25 points, or 1 percent, to 2,715 as of 11 a.m. Eastern time. It lost 1.2 percent Tuesday. The Dow Jones industrial average rose 209 points, or 0.9 percent, to 24,570. The Nasdaq composite added 60 points, or 0.8 percent, to 7,457. The Russell 2000 index leaped 23 points, or 1.5 percent, to 1,647, which put the index on pace for another record close.
The Russell fared far better than the rest of the market on Tuesday and has done better than other indexes in recent weeks. It closed at an all-time high on May 21.
ITALY IN FOCUS: Stocks in the U.S. and Europe sank Tuesday as investors worried that Italy would have new elections in a few months and that the vote would become a referendum on whether Italy, the third-largest economy in Europe, would stay in the euro. On Wednesday, premier-designate Carlo Cottarelli said there were “new possibilities” to form a government.
Italy’s FTSE MIB stock index climbed 1.5 percent after a 2.7 percent drop a day earlier. Prices for Italian government bonds also rose, sending yields down following a huge surge the day before.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.84 percent from 2.79 percent.
Interest rates rose and bank stocks recovered some of their losses from the previous day. When rates rise, banks can make more money on mortgages and other types of loans. JPMorgan Chase gained 1.3 percent to $107.27 and Bank of America picked up 1.4 percent to $53.69. Both stocks fell about 4 percent Tuesday.
EUROPE: The euro rose to $1.1606 from $1.1531 a day earlier, which was its lowest level in almost a year. The dollar rose to 108.88 yen from 108.24 yen.
Germany’s DAX climbed 0.4 percent while the FTSE 100 index in Britain rose 0.2 percent. The CAC 40 in France lost 0.6 percent.
EARNINGS: Wall Street continued to pore over quarterly results from retailers. Dick’s Sporting Goods soared 23.9 percent to $37.78 after it raised its annual profit forecast. Its first-quarter report was better than expected thanks in part to strong online sales. Printer and PC maker HP also raised its profit projections after its earnings and sales surpassed analyst estimates. HP climbed 3 percent to $21.94. Watchmaker Movado Group rallied 15.7 percent to $48.83.
Clothing company Chico’s FAS plunged 20.7 percent to $7.92 after its profit fell short of expectations and luxury retailer Michael Kors dropped 12 percent to $60 following a disappointing forecast for the year. Shoe retailer DSW gave up some of its gains from earlier in the year as it lost 9.8 percent to $23.52.
ENERGY: Energy companies rose as U.S. crude oil climbed 1.6 percent to $67.81 per barrel in New York. Brent crude, used to price international oils, added 1.6 percent to $76.67 a barrel in London.
Exxon Mobil jumped 2.9 percent to $80.70 and Chevron rallied 2.2 percent to $124.09.
Oil prices fell 7.6 percent in the last week following reports OPEC countries and Russia might start producing more oil soon. Those countries cut production at the start of 2017, which helped take U.S. crude from about $50 a barrel in late 2016 to more than $70 this month. They had agreed to keep production at its current levels until the end of this year, but upheaval in Venezuela and new sanctions on Iran could change their plans.
SURVEY SAYS: Payroll processor ADP said private U.S. businesses added 178,000 jobs in May. That’s a solid number even though it’s not as many jobs as they added over the winter. ADP reported strong hiring in the construction, education and health care fields as well as professional and business services. The federal government will release a jobs report Friday that also includes hiring by government agencies.
ALL’S WELLCARE: WellCare will pay $2.5 billion to become the biggest Medicaid coverage provider in Michigan and Illinois and add a pharmacy benefits management business, following the lead of competitors like UnitedHealth and Cigna. Pharmacy benefit managers run prescription drug coverage and insurers have been building or buy them to improve how they share patient data and manage care. They’re also trying to gain better control of prescription drug costs.
The stock rose 2.8 percent to $227.30.
ASIA: Japan’s Nikkei 225 stock index dropped 1.5 percent and the Kospi of South Korea dropped 2. The Hang Seng in Hong Kong slipped 1.4 percent.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay
