Pedestrians walk past a screen displaying the Hang Seng Index figure, in Hong Kong, China. (Photographer: Jerome Favre/Bloomberg)

Stocks Rise on Profit Optimism; Dollar Holds Gain: Markets Wrap

(Bloomberg) -- Equities rose, led by gains in financials and industrial companies, after Morgan Stanley earnings beat forecasts, helping to offset a slide in tech stalwarts such as Apple and Microsoft. The peso swung between gains and losses after President Donald Trump said he may prioritize a bilateral trade deal with Mexico.

With Morgan Stanley’s results Wednesday, the six largest U.S. banks have reported second-quarter earnings that mostly surpassed estimates, helping to push the S&P 500 Financials Index 2.7 percent higher since Friday. The dollar held onto gains as Federal Reserve Chairman Jerome Powell delivered an upbeat assessment of the U.S. economy during his second day of testimony to Congress.

“Banks are leading the way today as they did the past couple days,” Lindsey Bell, an investment strategist at CFRA, said by phone. “We’re actually seeing stocks respond very strongly to good earnings beats.”

The U.S. and Mexico are “getting closer” to reaching a trade deal, and the administration may advance separate talks with Canada later, Trump told reporters at the start of a cabinet meeting in Washington on Wednesday. Trump said earlier this year he may break up talks for a new North American Free Trade Agreement into separate tracks with Canada and Mexico.

Crude bounced between gains and losses as investors assessed conflicting supply-and-demand signals in the world’s biggest economy.

Stocks Rise on Profit Optimism; Dollar Holds Gain: Markets Wrap

Elsewhere, Bitcoin extended its biggest three-day rally this year, earlier climbing above $7,500.

Terminal users can read more in Bloomberg’s Markets Live blog.

These are some key events coming up this week:

  • Earnings season continues, with reports due from companies including: Microsoft, Taiwan Semiconductor Manufacturing and Unilever.
  • Initial U.s. jobless claims for the week ended July 14, the Philadelphia Fed Business Outlook Survey and the Conference Board’s U.S. Leading Index will be released Thursday.

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.2 percent to 2,815.62 as of 4:05 p.m. in New York.
  • The Dow Jones Industrial Average gained 0.3 percent to 25,199.29.
  • The Nasdaq Composite Index was little changed after climbing to a record high of 7,855.12 Tuesday.
  • The U.K.’s FTSE 100 Index gained 0.7 percent.
  • The MSCI Emerging Market Index slumped 0.2 percent.
  • The Stoxx Europe 600 Index rose 0.5 percent.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.1 percent, the second consecutive daily gain.
  • The euro slipped 0.2 percent to $1.1644.
  • The British pound dropped 0.3 percent to $1.3080.
  • The Japanese yen was mostly flat at 112.88 per dollar.
  • South Africa’s rand was little changed at 13.28 per dollar.

Bonds

  • The yield on 10-year Treasuries rose for a third consecutive day, climbing two basis points to 2.88 percent.
  • Italian 10-year yields rose four basis points to 2.51 percent.
  • Germany’s 10-year yield fell abut one basis point to 0.34 percent.

Commodities

  • West Texas Intermediate crude rose 1.2 percent to $68.91 a barrel.
  • Gold was little changed at $1,227.77 an ounce.

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