A trader works on the floor of the New York Stock Exchange (Photographer: Michael Nagle/Bloomberg)

Stocks Rise on Earnings, Shutdown Deal Optimism: Markets Wrap

(Bloomberg) -- Stocks rose as corporate earnings bolstered confidence in the economy and President Donald Trump said U.S. lawmakers agreed to re-open the government on an interim basis. Treasuries yields rose and the dollar weakened against most of its major peers.

The Dow Jones Industrial Average and Nasdaq Composite indexes erased their first weekly declines of the year to finish in the green, while the S&P 500 finished marginally lower. The rally in emerging-market assets picked up steam on speculation the arrival of a Chinese delegation in Washington next week may help pave the way for a trade deal. Adding to optimism were reports that the Federal Reserve is weighing an end to a program of reducing its balance sheet sooner than previously expected, a move that could ease measures of financial conditions.

“My sense is there’s potential for the risk taking channel to kick in,” said Tim Alt, a portfolio manager at Aviva Investors.

Stocks Rise on Earnings, Shutdown Deal Optimism: Markets Wrap

The shutdown deal was a dramatic turnaround for Trump after insisting for five weeks that he wouldn’t allow the government to reopen without funding for a border wall. He pivoted as his job approval plunged, air travel was disrupted and smooth processing of tax refunds was threatened.

“We still have the uncertainty but at least the crisis has been postponed or averted,” said John Carey, managing director and portfolio manager at Amundi Pioneer Asset Management. “It’s a question of relieving the short term pressure.”

Elsewhere, Venezuela’s defaulted 2027 dollar bonds climbed to 30.9 percent of face value as the European Union appeared to be moving toward pushing for an immediate election. West Texas oil futures closed higher as traders weighed the Venezuelan crisis and its possible effect on production with the outlook of a market that’s otherwise comfortably supplied.

And the pound posted its best week since September 2017, extending its increase on heightened optimism that a no-deal Brexit will be averted.

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.9 percent to 2,664.76 as of 4:05 p.m. New York time, while the Nasdaq Composite Index gained 1.3 percent and the Dow Jones Industrial Average increased 0.8 percent.
  • The Stoxx Europe 600 Index rose 0.6 percent.
  • The U.K.’s FTSE 100 Index dropped 0.1 percent.
  • Germany’s DAX Index rose 1.4 percent.
  • The MSCI Emerging Market Index rose 1.4 percent, the biggest gain in almost two weeks.

Currencies

  • The Bloomberg Dollar Spot Index dropped 0.7 percent, the biggest decline in about two weeks.
  • The euro jumped 1 percent to $1.1417.
  • The British pound rose 1.1 percent to $1.3214.
  • The Japanese yen gained 0.1 percent to 109.49 per dollar.

Bonds

  • The yield on 10-year Treasuries climbed three basis points to 2.75 percent.
  • Germany’s 10-year yield rose one basis point to 0.19 percent, the first increase in five days.
  • Britain’s 10-year yield rose four basis points to 1.31 percent.

Commodities

  • West Texas Intermediate rose 0.8 percent to $53.56 a barrel.
  • Gold rose 1.5 percent to $1,300 an ounce.

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