Stocks Notch Record Highs; Treasury Yields Climb: Markets Wrap
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Stocks Notch Record Highs; Treasury Yields Climb: Markets Wrap

U.S. equities rose to all-time highs for a third day with investors counting on the Federal Reserve to stay accommodative as the economy recovers from the coronavirus pandemic.

The S&P 500 and the Nasdaq Composite notched fresh highs, with Facebook Inc. rallying after unveiling a series of tools designed to expand shopping on its social media platforms. The Dow Jones Industrial Average declined for the first time in four days. Salesforce.com Inc. jumped 10% following the close of regular trading after raising its revenue outlook. Treasury yields increased and the dollar weakened.

“It’s pretty remarkable, the risk-on trade, for the past couple of months,” said Michael Reynolds, investment strategy officer at Glenmede Trust Co. “It just seems like a benign day as we sit near the all-time highs.”

Oil rose as traders eyed Tropical Storm Laura, which is expected to strengthen into a hurricane before making landfall later this week. U.S. gasoline futures rose to the highest level since March on concern over possible fuel shortages.

Stocks Notch Record Highs; Treasury Yields Climb: Markets Wrap

In addition to geopolitics and business confidence, investors are focused on vaccine progress as global economies reopen amid fresh outbreaks of the virus. Moderna Inc. said it’s near a deal to supply at least 80 million vaccine doses to the European Union.

“The pattern we’re watching seems to be vaccine clarity means buy the socially distant losers, all of the sectors that have taken a beating since you can’t get together,” said Mike Bailey, director of research at FBB Capital Partners.

Traders are also awaiting Fed Chair Jerome Powell’s scheduled speech on Thursday about the Fed’s long-awaited monetary policy framework review, which has focused on a new inflation strategy.

”If you think about what’s been driving markets, it’s really been the pace of recovery and primarily multiples have expanded due to hyper-loose monetary policy,” Troy Gayeski, co-chief investment officer of SkyBridge Capital, told Bloomberg TV.

Elsewhere, gold traded below $1,950 an ounce.

Stocks Notch Record Highs; Treasury Yields Climb: Markets Wrap

Here are some key events coming up:

  • Earnings from companies including ICBC, PetroChina, HP Inc., Royal Bank of Canada and Dollar General.
  • The U.S. Republican National Convention runs this week.
  • The Bank of Korea sets monetary policy and will hold a briefing on Thursday.
  • Fed Chair Powell speaks at an event on Thursday.

These are the main moves in markets:

Stocks

  • The S&P 500 Index gained 0.3% to 3,443.67 as of 4:01 p.m. New York time, the highest on record.
  • The Dow Jones Industrial Average decreased 0.2% to 28,248.75.
  • The Nasdaq Composite Index rose 0.8% to 11,466.47, the highest on record.
  • The Stoxx Europe 600 Index dipped 0.3% to 369.75.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.3% to 1,171.60.
  • The euro increased 0.4% to $1.1832.
  • The Japanese yen depreciated 0.4% to 106.40 per dollar, the weakest in more than a week.

Bonds

  • The yield on 10-year Treasuries gained three basis points to 0.68%, the highest in a week on the biggest rise in more than a week.
  • Germany’s 10-year yield increased six basis points to -0.43%, the highest in more than a week on the largest increase in almost 12 weeks.
  • Britain’s 10-year yield gained five basis points to 0.263%, the highest in almost 11 weeks on the biggest climb in almost two weeks.

Commodities

  • West Texas Intermediate crude rose 1.8% to $43.36 a barrel, the highest in almost six months on the largest advance in a week.
  • Gold was little changed at $1,928.47 an ounce.
  • Silver depreciated 0.1% to $26.52 per ounce, the weakest in more than a week.

©2020 Bloomberg L.P.

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