U.S. Stocks, Dollar Rebound; Brazil Shares Plunge: Markets Wrap

(Bloomberg) -- U.S. stocks rebounded from the worst selloff of the year Thursday and the dollar strengthened as data reinforced optimism in the economy even as political events continued to roil Washington. Brazilian assets plunged amid a government crisis.

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The S&P 500 Index edged higher as buyers emerged the day after the Trump administration’s travails sparked concern that his agenda is imperiled. Measures of jobless claims and regional manufacturing beat forecasts, adding to signs economic growth is on firm footing. The dollar benefited from weakness in emerging-market currencies as political turmoil engulfed Brazil. The Ibovespa lost more than 8 percent.

Financial markets stabilized as the Trump administration sought to move past the latest controversy to ensnare its policy agenda. U.S. stock volatility eased a day after spiking, while haven assets from gold to Treasuries held steady. Brazil’s latest crisis rattled emerging market equities and Washington remained abuzz with fresh developments as the Justice Department Wednesday appointed a special counsel to probe Russia’s role in the 2016 election. 

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Here are the major moves in the markets:

Stocks

• The S&P 500 rose 0.4 percent to close at 2,365.73, after the benchmark gauge slumped 1.8 percent on Wednesday, its worst day since Sept. 9. 
• Phone stocks added 1.2 percent, while shares of technology and consumer companies rallied.
• The Stoxx Europe 600 Index declined 0.5 percent, paring a drop that reached 1.2 percent.
• Brazil’s Ibovespa Index tumbled 8.8 percent, the most since October 2008, as political crisis returned to the country after last year’s impeachment process.

Currencies

• The Bloomberg Dollar Spot Index increased 0.3 percent, after dropping 0.5 percent on Wednesday to the lowest level since Nov. 8. 
• Brazil’s real led declines among emerging-market currencies, slumping 7.3 percent. South Africa’s rand weakened 1.7 percent.
• The euro fell 0.4 percent to $1.1112, after four straight days of gains. The British pound dropped 0.2 percent to $1.2943.

Bonds

• The yield on 10-year Treasuries was flat at 2.22 percent, following the biggest gain for the note since July.
• Benchmark yields in France and Germany fell three basis points.
• Bonds of state-controlled energy company Petroleo Brasileiro SA dropped by the most in six months amid a political crisis in Brazil. 
• The company’s 800 million euros of notes due in January 2025 led the slump, falling 3.6 cents on the euro to 103 cents, the biggest decline since November.

Commodities

• Gold futures slumped 0.7 percent to $1,249.50, halting a six-day advance sparked by haven demand.
• Zinc led a retreat in industrial metals, dropping 3.4, as political turmoil in the U.S. threatened the outlook for the world’s biggest economy. Copper slumped 0.5 percent.
• West Texas crude rose 0.51 percent to $49.32 a barrel, after jumping 0.8 percent in the previous session.

Asia

• The MSCI Asia Pacific Index slid 0.8 percent, the most since April 6. Japan’s Topix slumped 1.3 percent while a volatility measure on the Nikkei 225 Stock Average jumped to the highest this month. 
• The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong retreated 1.1 percent.

--With assistance from Samy Adghirni Mark Shenk and Vassilis Karamanis

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Eric J. Weiner