U.S. Stocks Approach Record Highs; Bonds Decline: Markets Wrap

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18 Oct 2019, 04:13 AM IST

U.S. Stocks Approach Record Highs; Bonds Decline: Markets Wrap

Traders work during the Slack Technologies Inc. initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) --

U.S. stocks climbed toward all-time highs amid a spate of mostly positive earnings reports. Doubts over whether a Brexit deal can win approval whipsawed the pound.

The S&P 500 fluctuated for most of Thursday around the 3,000 level, while disappointing results from IBM caused the Dow Jones Industrial Average to lag the other main equity benchmark indexes. Morgan Stanley became the latest big bank to defy expectations for weak growth. Netflix’s international performance impressed analysts.

“There’s no doubt there’s been some deescalation of risk, global geopolitical economic risks relative to where we were two weeks ago,” said Michael Kushma, global fixed income chief investment officer at Morgan Stanley Investment Management. “But it may be just a false dawn. We don’t know yet. Our crystal ball is very cloudy at the moment.”

“The environment doesn’t support higher equity prices,” said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management. “To move higher, markets have to get comfortable that you’re going to see a re-acceleration of earnings growth next year.”

Risk appetite was stoked across the board earlier as the U.K. and European Union said they had agreed on a new withdrawal plan, but it quickly ebbed when a key Northern Irish party said it won’t vote for the deal. The Stoxx Europe 600 Index erased its gain.

With doubts swirling over the Brexit deal’s chances of success, investors are also grappling with a mixed bag earnings from major European companies.

Earlier in Asia, stocks fell in Tokyo, Sydney and Seoul, rose in Hong Kong and were barely changed in Shanghai. Taiwan Semiconductor, the primary chip supplier to Apple, projected current-quarter revenue ahead of analysts’ estimates. The Australian dollar strengthened after the country’s jobless rate unexpectedly fell and full-time employment climbed.

Here are some key events coming up this week:

China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main movers in markets:

Stocks

The S&P 500 Index advanced 0.3% to 2,997.99 as of 4:02 p.m. New York time, the highest in more than three weeks.

The Dow Jones Industrial Average increased 0.1% to 27,026.36, the highest in more than three weeks.

The Nasdaq Composite Index climbed 0.4% to 8,156.85, the highest in more than three weeks.

The Stoxx Europe 600 Index declined 0.1% to 393.08.

Currencies

The Bloomberg Dollar Spot Index fell 0.4% to 1,199.72, the lowest in almost 12 weeks.

The euro advanced 0.5% to $1.1126, the strongest in more than seven weeks on the biggest rise in almost four weeks.

The Japanese yen strengthened 0.1% to 108.63 per dollar.

The British pound gained 0.3% to $1.2869, the strongest in five months.

Bonds

The yield on two-year Treasuries increased one basis point to 1.60%.

The yield on 10-year Treasuries gained one basis point to 1.76%.

Germany’s 10-year yield fell two basis points to -0.41%, the largest fall in more than a week.

Britain’s 10-year yield decreased four basis points to 0.677%.

Commodities

West Texas Intermediate crude gained 1.2% to $54.01 a barrel.

Gold strengthened 0.1% to $1,492.20 an ounce.

To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

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