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Stocks rise strongly on surge in oil price

American flags fly at the New York Stock

American flags fly at the New York Stock Exchange on Wall Street on July 6, 2015. Credit: AP / Mark Lennihan

Stocks rose strongly Monday as the price of oil surged, lifting energy stocks. Mining and chemicals companies and banks are also climbing. The stock market is coming off its best week of the year.

At the close on Wall Street, the Dow Jones industrial average had gained 228.7 points, about 1.4 percent, to 16,620.7. The Standard & Poor’s 500 index rose 27.2 points, about 1.5 percent, to 1,945.5. The Nasdaq composite advanced 66.2 points, about 1.5 percent, to 4,570.6. Last week was the best of the year for U.S. stocks.

CRUDE ENERGY: As markets closed benchmark U.S. crude climbed $1.59, about 5 percent, to $33.34 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price international oils, ended the day up $1.59 about 4.8 percent, to $34.60 a barrel in London. Oil prices fell Friday after a weeklong rally.

The International Energy Agency said Monday that it doesn’t expect oil prices to recover significantly until 2017. Oil prices have dropped about 70 percent since mid-2014.

ANALYST’S OPINION: “Stock market prices and oil prices have been tracking each other like a shadow through the first part of the year,” said analyst Michael Scanlon, managing director and portfolio manager for John Hancock Asset Management.

Scanlon said that usually doesn’t happen for long stretches. He said the market is rising and falling with oil prices because when prices go down, investors get tend to get concerned about the health of the global economy, and when oil prices rise, they are reassured.

TIMBER: Lumber Liquidators plunged $2.81, about 19.8 percent, to close at $11.40 after the U.S. government said people exposed to some types of its laminate flooring were three times as likely to get cancer as it had originally predicted. The Centers for Disease Control and Prevention now says the risk of cancer is six to 30 cases per 100,000 people. It previously estimated two to nine cases per 100,000 people.

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