Stocks Lifted by M&A as Dollar Rises to 2018 High: Markets Wrap

(Bloomberg) -- U.S. stocks edged higher following a spate of mergers and acquisitions while the dollar climbed to the strongest level this year. Crude rose past $70 a barrel before pairing gains.

Tech shares were the best performers in the U.S., lifting the S&P 500 Index. Oil, which reached its highest since November 2014 on speculation the U.S. would pull out of the Iran nuclear accord, erased the advance after President Donald Trump said he would announce a decision Tuesday and amid a report that European diplomats made progress on a deal to persuade Trump not to withdraw. Energy stocks went along for the ride.

“Sentiment had gotten extremely bullish” on energy, said Matt Maley, an equity strategist at Miller Tabak & Co. “It just seems too ripe for a sell-on-the-news reaction as soon as Trump came out with that tweet.”

The Stoxx Europe 600 Index climbed, though trading volumes were light thanks to a U.K. holiday. The euro weakened as 10-year Treasury yields hovered near 2.95 percent.

Mergers and acquisitions helped boost investor sentiment Monday, with Blackstone Group LP agreeing to buy Gramercy Property Trust in a cash deal valued at $7.6 billion, Nestle SA spending $7.15 billion for the right to market Starbucks Corp. products and Elliott Management Corp offering to buy Athenahealth Inc. for $6.5 billion. Earnings season continues, and data due this week may give traders a signal on the outlook for inflation.

Elsewhere, investors are closely following emerging-market assets after many extended their losses last week. Developing-nation stocks edged higher and currencies were weaker. Both Turkey’s lira and its equities retreated. Argentina’s peso seemed to stabilize following a tumultuous week of unscheduled central bank interest-rate increases.

Terminal users can read more in our markets live blog.

Some key events coming up this week:

• Chinese trade data is due Tuesday.
• It’s also the Australian annual budget Tuesday.
• Malaysia holds a general election Wednesday.
• Japanese Prime Minister Shinzo Abe hosts South Korean President Moon Jae-in and Chinese Premier Li Keqiang on Wednesday.
• There’s a Bank of England policy decision on Thursday.
• U.S. inflation data for April is due the same day.
• Trump’s Iran-deal deadline is this week.
• Some of the company earnings due include Walt Disney, Petrobras, Marriott, Toyota, Ambev and Deutsche Telekom.

And these are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.3 percent as of the close of trading in New York.
• The Stoxx Europe 600 Index climbed 0.6 percent to a three-month high.
• The MSCI Asia Pacific Index rose 0.3 percent.
• Germany’s DAX Index climbed 1 percent to the highest in more than three months.
• The MSCI Emerging Market Index rose 0.2 percent, the first advance in a week.

Currencies

• The Bloomberg Dollar Spot Index rose 0.2 percent to the highest in more than four months.
• The euro decreased 0.3 percent to $1.1925, the weakest since December.
• The British pound gained 0.2 percent to $1.3559, the first advance in almost two weeks.
• The Japanese yen rose 0.1 percent to 109.04 per dollar.

Bonds

• The yield on 10-year Treasuries was little changed at 2.95 percent.
• Germany’s 10-year yield declined two basis points to 0.525 percent.

Commodities

• West Texas Intermediate crude rose 0.1 percent to $69.80 a barrel.
• Gold was little changed at $1,314.49 an ounce.

--With assistance from Cormac Mullen Samuel Potter Christopher Anstey Todd White and Katherine Greifeld

To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh

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