US stocks buck turmoil weighing on global markets

Associated Press

NEW YORK

A burst of buying Friday in U.S. stocks defied slumps in other markets and offered hope for investors shaken by geopolitical turmoil. Major U.S. stock indexes closed up about 1 percent, buoyed by signs that tensions in Ukraine might be easing.

The rally on Wall Street contrasted with price declines in European and Asian stock markets. Fear has been creeping into stock and bond markets around the world in recent weeks against a backdrop of escalating global conflicts.

News Friday of U.S. fighter jets dropping bombs in Iraq and the end of a three-day cease-fire in Gaza weighed further on European markets. Asian markets also had a bad week, including a 5 percent drop in Japan’s benchmark stock index.

As anxieties have risen in recent days, money has been flowing from around the world into U.S. Treasurys, the perennial safe haven for spooked investors.

U.S. stock markets bucked the trend Friday as investors snapped up shares that had been beaten down in recent days. The buying surged late in the day on reports that Russia had ended military exercises near Ukraine. The Dow Jones industrial average surged 1.1 percent, its biggest gain since March. The index remains 3.4 percent below its record high set July 16.

In June and most of July, prices in major stock indexes in the United States rose even in the face of the widening conflicts around the world. Some experts warned that markets had grown dangerously complacent.

But then the West imposed increasingly crushing sanctions on Russia for supporting rebels in Ukraine. Israel’s bloody war in Gaza dragged on. And Sunni extremists made advances in northern Iraq.

Prices then began a sustained decline, even in resilient U.S. markets. U.S. stocks in July posted their first monthly loss since January.