Treasuries, Gold Surge as U.S. Stocks Advance: Markets Wrap

(Bloomberg) -- U.S. stocks edged higher to a fresh record, while haven assets from Treasuries to gold resumed rallies as investors awaited a slew of economic data around the Fourth of July holiday. The euro erased gains after Christine Lagarde was nominated to lead the European Central Bank.

The S&P 500 swung between gains and losses before rising into the close for a second straight all-time high. The 10-year Treasury yield slumped to 1.98% and gold surged back above $1,400 an ounce. Demand for riskier assets ebbed after a Federal Reserve official said she’s not ready to support a rate cut and news broke that House Democrats are stepping up their investigation into the president’s taxes.

U.S. markets close early tomorrow and are shut Thursday for the Fourth of July holiday. Data on private hiring, factory orders and the services sector are due Wednesday, with June’s government jobs report coming the final day of the week. The Japanese yen climbed and crude plunged more than 4% in New York.

“Everything’s two-fold oriented: what’s the Fed going to do in July with interest rates and then everything geopolitical is basically an everyday headline,” said Bob Phillips, managing principal at Spectrum Management Group. “Every time the market stalls, anxiety skyrockets and goes through the roof. There’s just a lot of fear out there.”

The Stoxx Europe 600 Index extended a modest advance while U.K. shares climbed to the highest in nine months. U.K. gilts rallied as construction data disappointed. The euro edged higher after Bloomberg reported ECB policy makers don’t see a need to rush into a rate cut this month. U.S. notes nudged up with most government bonds in Europe, where the yield on two-year Italian debt briefly dipped below zero.

In Asia, shares rallied in Hong Kong and its dollar strengthened as the market reopened after a holiday to catch up with Monday’s move -- despite violent local protests overnight. Chinese stocks were steady.
Here are some key events coming up:

• U.S. equity markets close at 1 p.m. Wednesday and all day Thursday for the Independence Day holiday. The bond markets close early Wednesday.
• The U.S. jobs report is due Friday and is projected to show non-farm payrolls rose by 164,000 in June, rebounding from 75,000 the month prior.

And here are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.3% at 4 p.m. New York time.
• The Nasdaq 100 Index added 0.4% and the Dow Jones Industrial Average gained 0.3%.
• The Stoxx Europe 600 Index climbed 0.4% to the highest in two months.
• The MSCI Asia Pacific Index increased 0.4% to the highest in two months.
• The MSCI Emerging Market Index fell 0.1%, the largest fall in a week.

Currencies

• The euro was flat at $1.1284.
• The Japanese yen strengthened 0.5% to 107.887 per dollar, the biggest increase in more than a week.
• The Australian dollar advanced 0.4% to 0.699 per dollar, the largest rise in more than a week.

Bonds

• The yield on 10-year Treasuries declined four basis points to 1.98%.
• The two-year rate lost three basis points to 1.75%
• Germany’s 10-year yield fell one basis point to -0.367%.

Commodities

• Gold futures gained 1.5% to $1,409.30 an ounce, the largest rise in more than a week.
• West Texas Intermediate crude fell 3.4% to $57.12 a barrel.

--With assistance from Paul Allen and Laura Curtis.

To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

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

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