Stocks Surge on Tech Strength Despite Trade Fears: Markets Wrap
(Bloomberg) -- Technology beat the trade war, for a day at least.
U.S. stocks rose in light trading Friday as biotech shares drove gains following a report that Biogen Inc.’s Alzheimer’s drug showed positive results in a large clinical trial. The dollar extended losses and Treasuries climbed as investors assessed a mixed jobs report and the impact of an escalating trade rift with China.
All major U.S. equity benchmarks were higher. The S&P 500 Index rose, clinching its biggest weekly increase in a month, following the release of the employment report, which showed U.S. hiring topped forecasts in June. Nasdaq gauges jumped by more than 1 percent with biotech firms, chipmakers, and software and tech hardware companies leading the way.
Volume was soft, with trading in S&P 500 stocks 23 percent below normal and Dow Jones Industrial Average shares 32 percent off their daily average. The dollar was lower and Treasuries rose as traders tried to determine how the Federal Reserve will react to the jobs report showing wage increases slowing.
“In many respects, it’s the best of a lot of worlds,” David Ader, chief macro strategist at Informa Financial Intelligence, said of the jobs report. “You’re not seeing inflation in this number. This doesn’t change anything for the Fed, and that I think is very, very important.”
Global stocks had been under pressure after China said it was retaliating over U.S. tariffs and President Donald Trump threatened to impose levies on even more Chinese goods. The escalating tit-for-tat is stoking market fears that the world economy could become destabilized amid a trade war that isn’t set to end anytime soon. For example, billionaire Ray Dalio, founder of the investment firm Bridgewater Associates, tweeted that “Today is the first day of the war with China.”
“If there’s one thing we’ve learned over the past couple of years, it’s that politics hasn’t been rattling the markets,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “But it’s the next phase, when it shows up in things people buy on a day-to-day basis -- that’s when it starts to get nasty.”
Follow our live blog as China says it is forced to retaliate on U.S. tariffs.
The Bloomberg Commodity Index reversed a loss and moved higher. West Texas crude slipped below $73 a barrel early in the session before surging higher, and copper traded at a one-year low after suffering its worst week since January 2015. Emerging-market shares put up their first gain of the week.
In Europe, stocks drifted higher, with defensive plays such as utilities among the leaders, underscoring the cautious mood. Deutsche Bank AG rose on speculation of takeover bids. The euro rose after a jump in German industrial production.
Terminal users can read more in Bloomberg’s Markets Live blog.
Here are the main market moves:
- The S&P 500 gained 0.8 percent to 2,759.71, while the Nasdaq 100 Index rose 1.5 percent and posted its best week since May.
- The Stoxx Europe 600 Index added 0.2 percent
- The MSCI All-Country World Index climbed 0.8 percent to the highest in two weeks.
- The MSCI Emerging Market Index increased 0.7 percent, the first advance in a week.
- The Bloomberg Dollar Spot Index fell 0.4 percent to the lowest in about a month.
- The euro jumped 0.5 percent to $1.1744, the strongest in more than three weeks.
- The British pound climbed 0.4 percent to $1.3277, the strongest in more than a week.
- The Japanese yen nudged 0.2 percent higher to 110.44 per dollar.
- The yield on 10-year Treasuries dipped less than a basis point to 2.8336 percent.
- Germany’s 10-year yield slid one basis point to 0.292 percent, the lowest in more than five weeks.
- Britain’s 10-year yield added one basis point to 1.267 percent.
- The Bloomberg Commodity Index rose 0.8 percent.
- West Texas Intermediate crude surged 1.2 percent to $73.82 a barrel.
- LME copper sank 1 percent to $6,282 per metric ton, reaching the lowest in about a year on its worst week since January 2015.
- Gold dipped 0.2 percent to $1,255.08 an ounce.
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