Stocks Rise on Signs of Easing U.S.-China Tensions: Markets Wrap

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Stocks rallied to the highest level in six weeks as signs the U.S. and China are closing in on a trade truce and stronger factory numbers boosted investor confidence in the global economy. Treasuries slid and the dollar gained.

The S&P 500 Index advanced for a fourth week, the longest streak since August, as technology firms and trade-sensitive companies from Boeing to Caterpillar rose after a report by Bloomberg News said China has offered a path to eliminate its trade gap with America. Major indexes padded earlier gains fueled by the biggest increase in factory output in 10 months. Facebook pared its rise after the Washington Post said regulators discussed fining the social-media giant.

The dollar strengthened for a fourth day, while the 10-year Treasury yield reached 2.78 percent. West Texas crude pushed above $53 a barrel, and gold slid along with the Japanese yen.

“Trade has been a weight on the market for some time now, I think the good thing is it’s pretty clear the administration wants a deal,” said Andrew Kenney, the chief investment officer of Delaware Life, which manages $37 billion.

The newest signal of easing tensions followed a Wall Street Journal report Thursday, which was later denied, that offered fresh hope that Treasury Secretary Steven Mnuchin would be able to de-escalate the spat. Adding to the bullish sentiment has been a slew of better-than-expected economic data this week.

Elsewhere, the pound weakened, erasing Thursday’s rally when U.K. opposition leader Jeremy Corbyn said that a second referendum remains an option in the Brexit saga.

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These are the main moves in markets:

Stocks

• The S&P 500 Index rose 1.3 percent as of 4 p.m. New York time, to the highest since Dec. 6.
• The Stoxx Europe 600 Index climbed 1.8 percent.
• The MSCI Emerging Market Index climbed 0.7 percent to the highest in more than six weeks.

Currencies

• The Bloomberg Dollar Spot Index gained 0.4 percent.
• The euro fell 0.2 percent at $1.1366.
• The Japanese yen decreased 0.4 percent to 109.72 per dollar.
• The MSCI Emerging Markets Currency Index slipped 0.1 percent.

Bonds

• The yield on 10-year Treasuries rose three basis points to 2.78 percent.
• Germany’s 10-year yield rose two basis points to 0.26 percent.

Commodities

• The Bloomberg Commodity Index gained 1.2 percent to a five-week high.
• West Texas Intermediate crude climbed 3.1 percent to $53.71 a barrel, the highest in five weeks.

--With assistance from Adam Haigh, Todd White and Brendan Walsh.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@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, Yakob Peterseil, Brendan Walsh

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