U.S. Stocks Reach Records, Bonds Fall on Trade: Markets Wrap

(Bloomberg) -- Stocks rose to all-time highs and Treasuries edged lower after an American official hinted that the U.S. and China are close to locking down a partial trade deal. The dollar declined.

The S&P 500 reached another record and gained for the sixth week in a row, the longest streak in two years, after White House economic adviser Larry Kudlow said late Thursday negotiations between the two countries were nearing the final stages. Both the Dow Jones Industrial Average, which past 28,000 for the first time, and the Nasdaq Composite also hit all-time highs.

Health care companies as well as trade-sensitive tech shares led the advance. Applied Materials Inc. surged after the maker of chip equipment boosted its sales forecast.

The benchmark 10-year Treasury yield rose for the first time this week, while the dollar dropped for a second day following a mixed bag of retail sales figures and weak factory numbers. The yen fell along with gold.

“The markets have priced in the fact that it may not get done even though you’ve seen it move higher. But if you look at whenever they say ‘trade war is on, trade tariffs are off,’ -- if you look at that maneuver, it’s volatile to a point but it’s not significant,” Matt Lloyd, chief investment strategist at Advisors Asset Management, said by phone. “Most of us have gotten used to it. We’ve re-calibrated. It’s like the boy who cried wolf.”

Concerns about the chances of the U.S. and China completing a phase-one pact had propelled Treasuries earlier this week, and acted as a headwind to a stock rally that keeps taking American gauges to record highs. The S&P 500 closed slightly higher on Thursday, though a mixed bag of global economic data has also given investors plenty to think about.

Elsewhere, European, emerging-market and Asian stocks gained. China’s yuan strengthened against the dollar.

These are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.8% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index climbed 0.4%.
• The MSCI Asia Pacific Index gained 0.6%.
• The MSCI Emerging Market Index rose 0.7%.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.2%.
• The euro gained 0.3% to $1.1054.
• The British pound rose 0.2% to $1.2904.
• The onshore yuan increased 0.3% to 7.0043 per dollar.
• The Japanese yen dipped 0.2% to 108.68 per dollar.

Bonds

• The yield on 10-year Treasuries gained one basis point to 1.83%.
• Germany’s 10-year yield increased one basis point to -0.34%.
• Britain’s 10-year yield advanced two basis points to 0.725%.
• Japan’s 10-year yield decreased less than one basis point to -0.068%.

Commodities

• West Texas Intermediate crude rose 1.6% at $57.70 a barrel.
• Gold fell 0.3% to $1,468.40 an ounce.

--With assistance from Namitha Jagadeesh, Samuel Potter and Claire Ballentine.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

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

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