Stocks Stage Late Rally to Close Up; Dollar Rises: Markets Wrap

(Bloomberg) -- U.S. stocks posted a late rally to close mostly higher for a fifth consecutive day, led by gains in the financial and energy sectors. The dollar strengthened after U.S. 10-year note yields briefly climbed past 3 percent.

The S&P 500 and Dow finished just in the green after slumping midday, when Bloomberg News reported that President Donald Trump instructed aides to proceed with tariffs on about $200 billion more in Chinese products. Financial markets were whipsawed this week by conflicting reports on the status of trade relations between the world’s two largest economies. The Nasdaq closer lower, though up for the week.

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“When the headlines hit, the knee-jerk reaction in the market is to either sell off or gain immediately,” Quincy Krosby, chief market strategist at Prudential Financial Inc, said by phone. “The president has had a couple of tweets suggesting he’s in no hurry to craft an agreement, but despite this, talks are apparently going to resume. And the question will be whether or not that leads to more negotiations.”

The push for additional tariffs is despite the U.S. Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war, according to four people familiar with the matter.

Stocks also finished higher in Europe and Asia amid optimism for U.S.-China trade talks and action by Turkey and Russia to support their currencies that helped foster a positive mood. Miners and carmakers led the advance in the Stoxx Europe 600 Index, following a rally in most Asian benchmarks as they extended their rebound from the worst run of losses in 16 years. Oil posted its third straight weekly advance as traders keep watch on Hurricane Florence.

From cooling U.S. inflation to central-bank meetings in Europe, the U.K. Turkey and Russia, it was a busy week for investors. American retail sales figures for August showed households took a breather from spending, though the data was still indicative of a strong job market and more after-tax pay.

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These are the main moves in markets:

Stocks

• The S&P 500 rose less than 0.1 percent to 2,904.97 as of 4:05 p.m. in New York, while the Dow Jones Industrial Average gained less than 0.1 percent to 26,154.67 and the Nasdaq Composite Index slipped less than 0.1 percent to 8,010.04.
• The Stoxx Europe 600 rose 0.4 percent.
• The U.K.’s FTSE 100 gained 0.3 percent.
• Germany’s DAX Index edged 0.6 percent higher.
• The MSCI Emerging Market Index jumped 1 percent.
• The MSCI Asia Pacific Index increased 1 percent.

Currencies

• The Bloomberg Dollar Spot Index increased 0.3 percent, the first gain in three days.
• The euro weakened 0.5 percent to $1.1632.
• The British pound fell 0.3 percent to $1.3065.
• The Japanese yen weakened 0.1 percent to 112.01 per dollar.

Bonds

• The yield on 10-year Treasuries increased two basis points to 2.99 percent, while the two-year note yield climbed two basis points to 2.77 percent.
• Germany’s 10-year yield rose three basis points to 0.45 percent.

Commodities

• West Texas Intermediate crude rose 05 percent to $68.93 a barrel.
• Gold dropped 0.6 percent to $1,194.14 an ounce to finish the week lower.

--With assistance from Robert Brand.

To contact the reporter on this story: 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

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