Stocks Advance Amid Earnings; Treasuries Gain: Markets Wrap

(Bloomberg) -- U.S. stocks rose to the highest in a week as investors sifted through the latest company earnings and poor labor data. Yields on Treasuries tumbled.

The S&P 500 rallied 1.15% with speculation mounting that the worst of the economic damage has passed as more of the country reopens. Filings for unemployment continued at historically high levels, but fell from the prior week. News that top U.S. and Chinese negotiators will speak as soon as next week on trade helped boost sentiment. The tech-heavy Nasdaq Composite turned positive for the year, wiping out losses that reached as much as 24% at the depths of the pandemic-fueled sell-off.

The bond market delivered a different take on the economy’s future. Two-year yields plunged to a record low and 10-year rates fell toward 0.6%. Banks stocks defied the move, with financial firms in the S&P 500 rising more than 2% to halt a five-day slide.

“You ask the question, are things likely to be better six months from now than they are today?” said Randy Frederick, vice president of trading and derivatives at Charles Schwab & Co. “Most people would say yes, and the market is looking ahead. Right now the market thinks the future looks better.”

In the latest corporate news:

• ViacomCBS Inc. rallied after reporting a surge in streaming subscribers.
• Raytheon Technologies jumped after results beat expectations. Moderna surged after saying its experimental vaccine for the new coronavirus would be in late-stage studies by early this summer.

The Stoxx Europe 600 Index gained as most national gauges and industry sectors climbed. Crude oil declined after reaching $26 a barrel in New York. The pound swung between losses and gains after the Bank of England kept its policy settings unchanged and signaled it may expand monetary stimulus as soon as next month.

Risk assets rebounded swiftly in April following a dramatic sell-off in the first quarter, but stocks have struggled for direction this month as bulls and bears duel over the outlook. Optimists point to efforts to reopen economies, a slowing rate of new infections and unprecedented stimulus. Pessimists fret over the mounting economic toll, with payrolls data from the largest economy on Friday expected to be dire.

Worries about rising tension between the U.S. and China have added an extra headache for investors lately; the planned call between the two countries may signal an effort to de-escalate the situation.

Most Asian stocks slipped earlier, including in Japan where exchanges opened for the first time this week following a holiday. China’s yuan advanced offshore after the country reported a surprise gain in exports, even as the virus pandemic damaged global demand.

Here are some key events coming up:

• U.K. markets will be closed on Friday for a holiday.
• Friday also brings the U.S. jobs report for April, expected to show a severe impact from the pandemic. The median forecast in a Bloomberg survey of economists calls for a 21 million plunge in payrolls

These are some of the main moves in markets:

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