Dow Climbs Most in Five Weeks as Treasuries Drop: Markets Wrap

(Bloomberg) -- The Dow Jones Industrial Average posted its biggest gain in five weeks and the three major U.S. equity benchmarks closed at records as corporate earnings beat estimates.

Stocks were bolstered by IBM’s forecast for its first sales growth in five years, which sent its shares to their biggest advance since 2009, and better-than-expected results at Abbott Laboratories and Northern Trust Corp. A gauge of commodities declined as copper and gold slipped. Treasury yields increased after traders added to bets on steeper U.S. interest rates.

More than 80 percent of the 52 members of the S&P 500 Index that have already reported earnings for the most recent quarter beat analysts’ forecasts.

Fed funds futures indicate a roughly 80 percent chance that U.S. policy makers will raise rates at their December meeting, up from 72 percent Friday. President Donald Trump’s choice for the next Fed chair will be unveiled before he leaves Nov. 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said Tuesday. John Taylor was said to have impressed Trump in an interview, buoying gains in the greenback earlier this week given the assumption by many that he would favor tighter policy. 

Elsewhere, The Stoxx Europe 600 Index rose on wagers the European Central Bank will remain accommodative even as it tapers asset purchases. Stocks in Shanghai gained after Chinese President Xi Jinping laid out a road map to turn the country into a leading global power by 2050. Investors are watching to see whether Xi will push through tough reforms as the world’s second-largest economy faces structural challenges over the next five years.

Terminal subscribers can read more in our Markets Live blog.

Here are some key events coming up this week:

• China releases data for GDP, industrial production and retail sales on Thursday.
• Markets in Malaysia, Singapore and Sri Lanka were closed on Wednesday for holidays.

Here are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.1 percent at the close in New York.
• The Dow Jones Industrial Average added 0.7 percent
• The Stoxx Europe 600 Index climbed 0.3 percent. 
• The U.K.’s FTSE 100 Index gained 0.4 percent. 
• Germany’s DAX Index increased 0.4 percent to a record. 

Currencies

• The Bloomberg Dollar Spot Index was little changed. 
• The euro rose 0.2 percent to $1.1794.
• The British pound gained 0.1 percent to $1.3198.
• The Japanese yen sank 0.6 percent to 112.92 per dollar.

Bonds

• The yield on 10-year Treasuries increased four basis points to 2.34 percent, the highest in a week. 
• Germany’s 10-year yield climbed three basis points to 0.39 percent. 
• Britain’s 10-year yield jumped four basis points to 1.31 percent.

Commodities

• West Texas Intermediate rose 0.2 percent to $52 a barrel.
• Gold dipped 0.3 percent to $1,280.76 an ounce, a one-week low
• Copper fell for a second day, declining 0.6 percent to $3.175 a pound

--With assistance from Adam Haigh Andreea Papuc Cormac Mullen Robert Brand and David Wilson

To contact the reporter on this story: Brendan Walsh in Austin at bwalsh8@bloomberg.net.

To contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.net.