Stocks Gain a Second Day on Tech Rally; Oil Surges: Markets Wrap

(Bloomberg) -- Stocks gained as the technology sector rebounded and energy-related shares rallied with crude oil. Treasury two-year note yields rose to a decade high with the U.S. selling debt and expectations becoming cemented for more Federal Reserve rate increases.

The S&P 500 and Nasdaq rose for a second day, while the Dow recovered from Monday’s losses after investors shook off lingering anxiety about U.S. and Chinese trade relations. Apple, Microsoft, Facebook, Amazon and Google parent Alphabet pushed the tech heavy Nasdaq 100 Index up the most in about two weeks. European shares ended mostly flat. In emerging markets, shares fell while a gauge of currencies erased earlier gains.

“Tech is strong, rebounding from that selloff it had,” said Gary Bradshaw, a portfolio manager at Hodges Capital Management in Dallas. “It goes back to second quarter earnings that were exceptionally strong. Obviously we still have trade that hasn’t been worked out, but in spite of a few negatives, this market wants to continue to go higher.”

Crude rose the most since June as Hurricane Florence threatened U.S. East Coast gasoline markets and sanctions began crimping Iranian oil exports. East Coast motorists may see “dramatic” spikes in gasoline prices, according to AAA, as mass evacuations stretch supplies and Florence’s heavy rains imperil major fuel pipelines.

Shares fell earlier after the World Trade Organization said China would ask for permission to retaliate against the U.S. due to its failure to modify anti-dumping methodologies.

Worsening relations between the U.S. and China have been at the top of the agenda, with the Trump administration ready to boost tariffs on even more goods. That’s overshadowed optimism for a trade deal between the EU and the world’s biggest economy. The memory of summertime volatility and weakness in commodities also still provides plenty of reasons for caution as investors brace for meetings of central banks of Argentina, Turkey and Russia this week.

“People are waiting for some additional news on the trade front,” said Peter Jankovskis, co-chief investment officer at Oakbrook Investments. “That’s a big thing that’s overhanging the market right now.”

Terminal users can read more in our Bloomberg Markets Live blog.

Here are some key events coming up this week:

• Policy decisions from the Bank of England and the European Central Bank on Thursday.
• Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe will meet.
• Apple unveils its latest iPhones on Wednesday.
• Australia employment is due Thursday.
• China releases August industrial production, retail sales data on Friday.
• U.S. retail sales, industrial production, consumer sentiment on Friday.

These are the main moves in markets:

Stocks

• The S&P 500 Index climbed 0.4 percent as of 4:03 p.m. in New York, while the Dow Jones Industrial Average gained 0.4 percent and the Nasdaq Composite Index increased 0.6 percent.
• The Stoxx Europe 600 Index dropped less than 0.1 percent.
• The U.K.’s FTSE 100 Index was little changed.
• Germany’s DAX Index eased 01. percent.
• The MSCI Emerging Market Index sank 0.7 percent to the lowest in about 14 months.
• The MSCI Asia Pacific Index declined 0.1 percent, reaching the lowest in about 13 months on its ninth consecutive decline.

Currencies

• The Bloomberg Dollar Spot Index was little changed, after rising as much as 0.2 percent.
• The euro was little changed at $1.1588.
• The British pound fell 0.1 percent to $1.3016.
• The Japanese yen weakened 0.4 percent to 111.60 per dollar.

Bonds

• The yield on 10-year Treasuries rose five basis points to 2.98 percent, while the two-year note yield increased four basis points to 2.75 percent.
• Germany’s 10-year yield increased three basis points to 0.43 percent, the highest in a month.
• Britain’s 10-year yield rose three basis points to 1.50 percent.
• Italy’s 10-year yield rose four basis points to 2.94 percent.

Commodities

• West Texas Intermediate crude rose 2.8 percent to $69.44 a barrel.
• Gold was little changed at $1,196.25 an ounce.

--With assistance from Eddie van der Walt.

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

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Dave Liedtka

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