U.S. Stocks Rise as Focus Turns to Interest Rates: Markets Wrap

(Bloomberg) -- U.S. stocks finished higher and the S&P 500 Index rose to a record, as investors put off big bets before a series of key central bank meetings this week. Oil climbed to $58 a barrel.

Most major equity gauges advanced, led by more than 1 percent increases in media, telephone and technology hardware shares. Earlier, index futures briefly erased gains after an explosion rocked midtown Manhattan in what authorities have labeled a terrorist attack. Treasuries fell with gold, and the dollar was up slightly.

In Europe, stocks struggled for direction. Bonds rose and the euro climbed. The pound slipped, as some of the promises made to clinch a breakthrough Brexit deal last week started to fray. In Asia, the Nikkei 225 reclaimed a 26-year high.

Monetary policy takes center stage this week, with the Fed expected to raise interest rates at its meeting on Wednesday and the European Central Bank set to reveal details of plans to taper asset purchases on Thursday. The Bank of England and Swiss National Bank also meet. With the global economy heading into its strongest period since 2011, Wall Street economists are bracing investors for the biggest tightening in more than a decade.

“We have a pretty busy week here,” Ernie Cecilia, the chief investment officer at Bryn Mawr Trust Co., said by phone. “I don’t want to dismiss what’s going on in New York, that’s not my point, but it looks like until we know what’s involved, it looks like I’ll call it under control, whatever that might mean. We have a number of things this week. Further work on tax reform from a conference perspective and there will probably be issues that get leaked out as they try to reconcile the Senate and House bills. That will be key and whether or not there are any significant changes.”

Elsewhere, oil rose as U.S. drillers expanded the crude rig count to a three-month high. Bitcoin futures began trading in Chicago and were at $18,630 as of 4:00 p.m. in New York.

Terminal customers can read more in our Markets Live blog.

Here are some of the key events scheduled for this week:

• Fed policy makers on Wednesday are projected to raise the target range for their benchmark interest rate against a backdrop of continuing robust U.S. economic conditions, a vibrant labor market and forecasts for inflation to pick up.
• The European Central Bank, the Bank of England and the Swiss National Bank set monetary policy at their respective meetings on Thursday.
• Among top U.S. economic reports are consumer inflation on Wednesday and retail sales on Thursday.
• European lawmakers continue to debate Brexit and weigh moves on the next step, while North America Free Trade Agreement negotiators meet again.

And these are the main moves in markets:

Stocks

• The S&P 500 closed up 0.3 percent to a record 2,659.98.
• The Stoxx Europe 600 Index fell less than 0.1 percent.
• The MSCI Asia Pacific Index jumped 0.7 percent to the highest in more than a week.
• The MSCI Emerging Market Index increased 0.8 percent to the highest in a week.

Currencies

• The Bloomberg Dollar Spot Index rose less than 0.1 percent.
• The euro was little changed at $1.1772.
• The British pound dipped 0.4 percent to $1.3338, the weakest in two weeks.
• The Japanese yen fell less than 0.1 percent to 113.55 per dollar.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.3868 percent.
• Germany’s 10-year yield fell one basis point to 0.293 percent, the lowest in more than five months.
• Britain’s 10-year yield decreased eight basis points to 1.202 percent, the lowest in almost three months.
• Japan’s 10-year yield dipped less than one basis point to 0.05 percent.

Commodities

• West Texas Intermediate crude advanced 1.1 percent to $58 a barrel.
• Gold fell 0.5 percent to $1,242.85 an ounce.
• Copper increased 1.1 percent to $3.01 a pound.

--With assistance from Joanna Ossinger Cormac Mullen and Sarah Ponczek

To contact the reporter on this story: Eric J. Weiner in New York at eweiner12@bloomberg.net.

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

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