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Energy leads early gains for U.S. stocks

The Wall Street subway station near New York

The Wall Street subway station near New York Stock Exchange in Manhattan on Friday, May 27, 2016. Photo Credit: Bloomberg News / Michael Nagle

Stocks are rising in early trading on Wall Street, led by gains in energy companies as prices for oil and gas climb.

Chesapeake Energy climbed 2.6 percent in the first few minutes of trading Monday and Southwestern Energy rose 2.4 percent.

The price of benchmark U.S. crude oil rose 1.8 percent to just under $50 a barrel in New York. Natural gas prices also rose.

European stock markets advanced Monday as investors scaled back expectations of an imminent interest rate hike from the U.S. Federal Reserve following weaker-than-expected jobs data.

KEEPING SCORE: In Europe, France’s CAC 40 was up 0.2 percent at 4,428 while Germany’s DAX rose 0.2 percent to 10,118. The FTSE 100 index of leading British shares outperformed its peers, rising 1.1 percent to 6,276. U.S. shares were poised for modest gains at the open, with Dow futures and the broader S&P 500 futures up 0.2 percent.

U.S. FOCUS: Friday’s weak U.S. jobs data are continuing to drive markets. Traders think the 38,000 increase in May payrolls, which was the smallest in five years, makes it less likely that the Fed will raise interest rates again at its meeting next week. Traders will be monitoring a speech later from Fed Chair Janet Yellen to see if there is a change in tone in light of the payrolls data.

ANALYST TAKE: “The big event of the day will come in the form of Yellen’s appearance, which coming just a few days after a game changing payrolls number, will be likely to see a significantly different tone,” said Joshua Mahony, Market Analyst at IG. “The committee has reiterated their data dependence, which according to this latest batch of employment data, would not necessarily support a rate hike.”

BREXIT FEARS: The other big scheduled event this month that has the potential to cause big jitters in the markets is the June 23 referendum in Britain over the country’s future in the European Union. Worries that Britain may vote to leave the EU have mounted following a run of opinion polls showing the “leave” campaign in the lead. The pound was down 0.8 percent at $1.4405. “The markets are going to remain very sensitive to them given the consequences that a vote to leave could have for the pound,” said Craig Erlam, senior market analyst at OANDA.

ASIA’S DAY: Japan’s benchmark Nikkei 225 fell nearly 0.4 percent to finish at 16,580.03. Hong Kong’s Hang Seng added 0.4 percent to 21,036.24, and the Shanghai Composite edged down 0.2 percent to 2,934.10. Trading was closed in South Korea for a holiday.

ENERGY: Benchmark U.S. crude oil rose 93 cents to $49.55 a barrel in New York. Brent crude, which is used to price international oils, gained $1.08 to $50.72 a barrel in London.

CURRENCIES: The euro was flat at $1.1358 while the dollar rose 0.5 percent to 107.15 yen.

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