A pedestrian uses his mobile phone in front of an electronic stock board at a securities firm in Tokyo, Japan (Photographer: Kiyoshi Ota/Bloomberg)

Stocks Jump in Best Day Since 2015 as Dollar Falls: Markets Wrap

(Bloomberg) -- U.S. equities surged back from the biggest weekly rout in two years, with major benchmarks climbing more than 2.7 percent on signs that an escalation of trade tensions was beginning to ease.

Chipmakers and banks led gains as the S&P 500 Index posted its biggest one-day jump since August 2015, while 20 stocks climbed for every one that fell. The advance erased Friday’s drop, though the gauge still had a ways to go to make up all of last week’s losses. Facebook Inc. was a noticeable underperformer, ending just slightly higher after the Federal Trade Commission said it has an open, non-public probe into the company’s privacy practices.

The optimism toward U.S. stocks emerged after the limits of the Trump administration’s willingness to embrace protectionism came into view over the weekend. Treasury Secretary Steven Mnuchin told Fox News that he’s “cautiously hopeful” that China will reach a deal to avoid tariffs on $50 billion of U.S. exports, while European leaders demanded a permanent exclusion at the threat of retaliation and a deal was struck with South Korea.

The Trump administration tends “to negotiate to a more reasonable position, or more toward the center, as time goes on,” Maggie Gage, the head of Washington research at Credit Suisse Securities, said in an interview on Bloomberg Television. “We’re cautiously optimistic that that will apply here too with the Chinese tariffs.”

Microsoft Corp.’s 7.6 percent surge was the biggest contributor to the S&P 500’s advance, followed by the 4.8 percent gain in Apple Inc. Gains in financial shares were led by Comerica Inc. and Metlife Inc.

Elsewhere, 10-year Treasury yields edged higher ahead of major debt sales. The dollar dropped to a one-month low and European shares slid for a fourth day as investors remain on edge over the region’s growth prospects. Brent crude traded near $70 a barrel on lingering tension in the Middle East. A measure of U.S. corporate junk bonds rose the most in a month. The euro advanced to the strongest since mid-February.

Here’s a list of of the main events coming up this week:

  • U.S. personal income and spending data for February are due to be released on Thursday.
  • The big four euro-are economies are due to release March CPI readings.
  • The U.S. Treasury will probably auction about $294 billion of bills and notes this week, its largest slate of supply ever.

Terminal users can read more in our markets live blog.

And these are the main moves in markets:

Stocks

  • The S&P 500 Index rose 2.7 percent as of the close of trading in New York.
  • The Stoxx Europe 600 Index fell 0.7 percent.
  • The MSCI All-Country World Index rose 1.5 percent.
  • The MSCI Asia Pacific Index rose 0.5 percent, the largest advance in two weeks.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.4 percent to the lowest in five weeks.
  • The euro climbed 0.8 percent to $1.2456.
  • The British pound jumped 0.7 percent to $1.4232, the strongest since Feb. 1.
  • The Japanese yen fell 0.7 percent to 105.46 per dollar.

Bonds

  • The yield on 10-year Treasuries climbed four basis points to 2.85 percent.
  • Germany’s 10-year yield was little changed at 0.52 percent.
  • Britain’s 10-year yield was little changed at 1.44 percent.

Commodities

  • Gold climbed 0.4 percent to $1,352.15 an ounce, the highest in a month.
  • Brent crude declined 0.6 percent to $70.05 a barrel.
  • Copper futures fell 0.4 percent to $2.982 a pound.

©2018 Bloomberg L.P.

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