By Joseph Adinolfi and Carla Mozee, MarketWatch

Rising oil prices and fading Brexit fears help boost stocks

The Dow Jones Industrial Average climbed more than 200 points Wednesday as a rally in crude-oil prices and a retrenchment in Brexit fears put stocks on track to log a second straight day of sharp gains.

A U.S. Energy Information Administration report showing a sharp drop in domestic crude supplies (http://www.marketwatch.com/story/oil-gains-more-ground-after-eia-reports-41-million-barrel-fall-in-us-crude-supplies-2016-06-29) sent oil prices soaring, which carried energy and materials shares higher.

Inventories have been falling for months, but so far the U.S. hasn't seen a corresponding rise in active oil rigs, which bodes well for the price of oil--and by extension, energy and materials stocks.

"We could see supplies continue to draw down and oil remain relatively high compared with its recent price," said Paul Nolte, portfolio manager at Kingsview Asset Management.

Investors will be watching the Baker Hughes Inc.'s(BHI) weekly rig-count data for more clues about this trend, Nolte said.

The Dow climbed 214 points, or 1.2%, to 17,622, as nearly all 30 of the blue-chip gauges components trading in positive territory, led by a 2.5% gain in Chevron Corp. The S&P 500 rose 26 points, or 1.3%, to 2,062, with all 10 of its sectors trading higher, led by a sharp 2.1% jump in energy shares and a 1.5% rise in materials.

   Meanwhile, the tech-heavy Nasdaq Composite Index   jumped 72 points, or 1.5%, to 4,763. 

U.S. equities followed Asian and European stock markets higher.

Investors have shown that they are willing to wait for more clarity about the timeline and details of the U.K.'s exit from the EU, dubbed Brexit. Meanwhile, they are shifting their attention back to monetary policy, corporate earnings and the U.S. economic outlook, said Jack Ablin, chief investment officer at BMO Private Bank.

"The next time we come face to face with Brexit could be in the second-quarter earnings results if we hear management wringing their hands about the strong dollar," Ablin said.

Though the Fed has stayed mum about how the Brexit vote might affect its outlook, investors now expect it will stay on hold for the rest of the year. The Fed-funds futures market, where traders place bets on the timing of future rate increases, is pricing in a higher probability of a rate cut this year than a hike, according to the CME Group's FedWatch tool.

With global bond yields expected to remain lower for longer, dividend-paying utilities, technology and consumer-staples shares are looking increasingly attractive, Nolte said.

"Now that the dust has settled, people are looking around and saying 'well, rates will stay low, so I can go back to buying dividend paying stocks," Nolte said.

The U.K. has yet to trigger Article 50 of the Lisbon Treaty, which would initiate the process of withdrawing from the EU. Leaders in Brussels are pushing for a quick start to the exit process, but British Prime Minister David Cameron, who announced his impending resignation after the vote, has said he would leave that task to his successor.

Read:Brexit's Article 50: How 250 words could chart Britain's future (http://www.marketwatch.com/story/brexits-article-50-how-250-words-could-chart-britains-future-2016-06-25)

Also:After Brexit, will Britain change course and 'Breturn' to the EU? (http://www.marketwatch.com/story/after-brexit-get-ready-for-a-breturn-as-britain-reverses-course-2016-06-28)

Also read: 5 ways to stop Brexit from happening (http://www.marketwatch.com/story/5-ways-to-stop-brexit-from-happening-2016-06-27)

On Tuesday (http://www.marketwatch.com/story/dow-futures-rally-200-points-as-us-stocks-get-set-to-rebound-2016-06-28), the Dow jumped 269.48 points, or 1.6%, to 17,409.72. It lost 900 points in the two sessions after the Brexit vote. The S&P 500 picked up 1.8%, while the Nasdaq Composite closed up 2.1%.

Economic data: Consumer spending increased for a second month in May, though at a slower pace than the prior month.

Core prices rose at an annualized rate of 1.6% in May, according to the PCE price index, the Fed's preferred gauge of inflation.

Pending home sales slid 3.7% in May, a step back after several months of strong sales gains. Stocks edged lower after the data but have since climbed to session highs. .

Movers and Shakers: Worthington Industries(WOR) shares rallied 1.8% after reporting stronger quarterly earnings than expected.

General Mills Inc.(GIS) climbed 2.5% after posting fiscal fourth-quarter adjusted earnings and revenue (http://www.marketwatch.com/story/general-mills-shares-rise-after-dividend-increase-earnings-beat-2016-06-29) that topped Wall Street's expectations. The maker of Cheerios cereal, Yoplait yogurt and other foods raised its quarterly dividend as well as its target for cost savings.

General Electric Co.(GE) rose 1.8% after the U.S. government rescinded its designation (http://www.marketwatch.com/story/ge-capital-no-longer-systemically-important-institution-government-rules-2016-06-29) of GE Capital as a systemically important nonbank financial institution.

Monsanto Co. (MON) shares traded 1.5% higher despite the company reporting sales for its fiscal third quarter that fell short of expectations (http://www.marketwatch.com/story/monsanto-misses-profit-and-sales-expectations-shares-drop-2016-06-29). Separately, EU antitrust regulators signaled they will conduct a strict review (http://www.marketwatch.com/story/eu-to-open-review-of-bayer-monsanto-merger-2016-06-29-6485346) of Bayer AG's (BAYN.XE) pending $62 billion merger with Monsanto.

PrivateBancorp Inc.'s shares (PVTB) gained 22% after Canadian Imperial Bank of Commerce (CM.T) said it's agreed to buy the Chicago-based lender (http://www.marketwatch.com/story/cibc-agrees-to-purchase-privatebancorp-for-38-billion-2016-06-29)for about $3.8 billion in cash and stock.

Tesaro Inc.(TSRO) share price doubled after the biotech company's late-stage trials of an ovarian cancer treatment met primary endpoints (http://www.marketwatch.com/story/tesaros-stock-nearly-doubles-toward-record-open-after-successful-cancer-treatment-trial-2016-06-29).

Shire PLC(SHPG) (SHPG) shares climbed 4.2% after the drugmaker said a trial of its treatment (http://www.marketwatch.com/story/shires-stock-surges-after-adhd-drug-trial-meets-key-endpoints-2016-06-29)for attention-deficit/hyperactivity disorder, or ADHD, met its primary goals.

Nike Inc.(NKE) shares gained 1.6% after the company reported quarterly profit fell 2% (http://www.marketwatch.com/story/nike-struggles-in-north-america-as-rivals-score-2016-06-28) late Tuesday. Following the report, shares tumbled in after hours trade.

Autoliv Inc.(ALV) was down nearly 8% after the maker of seat belts and air bags said it's cooperating with Toyota Motor Corp.'s (7203.TO) (7203.TO) recall of 1.4 million vehicles.

Southwestern Energy Co.(SWN) fell 5.9% after the oil-and-gas producer proposed a stock offering (http://www.marketwatch.com/story/southwestern-energys-stock-falls-after-launching-share-offering-2016-06-29).

Terms of Wal-Mart Stores Inc.'s(WMT) recent deal to buy a 5% stake in JD.com Inc.(JD) could spur Wal-Mart to increase its investment in the Chinese e-commerce company, The Wall Street Journal reported (http://www.wsj.com/articles/wal-mart-deal-with-jd-com-includes-incentives-for-retailer-to-raise-stake-1467191406?mod=wsj_nview_latest).

AeroVironment Inc. shares (AVAV) fell 4.7% after the drone maker posted a decline in quarterly revenue and issued a financial outlook that largely fell short of expectations (http://www.marketwatch.com/story/aerovironment-drone-sales-lose-altitude-2016-06-28).

Other markets: Gold futures were up 0.5% at $1,324 an ounce. The ICE U.S. Dollar Index was down 0.6% at 95.6200.

(END) Dow Jones Newswires

June 29, 2016 11:35 ET (15:35 GMT)

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