U.S. Stocks Rally to Record, Treasuries Slump: Markets Wrap

(Bloomberg) --

U.S. stocks rallied to an all-time high, while Treasuries slumped on speculation efforts will succeed at minimizing the economic impact from the coronavirus. Crude oil rallied after tumbling into a bear market.

The S&P 500 Index’s three-day gain topped 3%, and the Nasdaq indexes added to records. Risk sentiment got a boost overnight after a string of reports on possible vaccines, but the World Health Organization later said there are no proven therapeutics. Treasuries retreated, sending 10-year yields above 1.64%, even as more quarantines were announced in an effort to control the virus. Energy producers surged as crude rallied the most in almost a month on the prospect of OPEC output cuts.

Havens including the yen and Swiss franc slipped. The dollar rose, with data showing U.S. firms added more jobs than economists’ forecasts in January. Copper jumped 1.7%.

Read more: Why Reports of Drugs for Virus Are Premature

U.S. stocks continued their torrid rebound from the virus-fomented sell-off as optimism mounted that the spread will be contained and more central banks signaled a willingness to act if the virus undermines demand, inflation and financial markets. Better-than-forecast corporate earnings also continued boost equities.

“The market is shrugging it off. You can see that the effort is there and the market is saying that this isn’t going to break out into a pandemic,” Michael Pytosh, chief investment officer of equities at Voya Investment Management, said by phone. “It’s not going to cause some cataclysmic medical problem in the world.”

Here are some key events coming up:

• The Reserve Bank of India’s interest rate decision is due Thursday.
• German factory orders for December are due Thursday, followed by industrial production on Friday.
• The U.S. employment report for January is set for Friday release.

And these are the main moves in markets:

Stocks

• The S&P 500 Index climbed 1.1% as of 4 p.m. New York time.
• The Nasdaq 100 Index added 0.4%.
• The Stoxx Europe 600 Index gained 1.2%.
• The MSCI Asia Pacific Index rose 0.6%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.2%.
• The British pound fell 0.3% to $1.2992.
• The euro declined 0.4% to $1.0998.
• The Japanese yen weakened 0.3% to 109.806 per dollar.

Bonds

• The yield on 10-year Treasuries rose five basis points to 1.65%.
• The two-year rate added three basis points to 1.44%.
• Germany’s 10-year yield increased four basis points to -0.36%.

Commodities

• West Texas Intermediate crude increased 2.9% to $51.04 a barrel.
• Copper rose 1.7% to $2.578 a pound.
• Gold added 0.2% to $1,556.47 an ounce.

--With assistance from Todd White and Brendan Walsh.

To contact the reporter on this story: Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net;Christopher Anstey at canstey@bloomberg.net

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