Stock Rally Reaches New Highs on Stimulus Optimism: Markets Wrap

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07 Dec 2020, 04:19 AM IST

Stock Rally Reaches New Highs on Stimulus Optimism: Markets Wrap

A woman wearing a protective mask cycles past an electronic stock board displaying the Nikkei 225 Stock Average, center, outside a securities firm in Tokyo, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

(Bloomberg) -- U.S. stocks climbed to all-time highs and Treasury yields jumped after a report showing U.S. employment gains slowed in November bolstered expectations for more federal stimulus.

All major indexes for U.S. equities -- the S&P 500, the Dow Jones Industrial Average, the Russell 2000 and the Nasdaq Composite Index -- closed at records. Such synchronized highs were last seen in January 2018. The dollar posted its biggest weekly decline in five, while the yield on the 10-year Treasury note reached the highest in nine months.

“One of the recurring themes this year is the resiliency of the market, it’s been amazing and impressive,” said John Porter, head of equities at Mellon Investments.

Labor Department figures showed nonfarm payrolls increased by a less-than-forecast 245,000 from the prior month, as the unemployment rate dipped 0.2 percentage point to 6.7%. President-elect Joe Biden called the report “grim” and said it shows “there’s no time to lose” for Congress to pass a new Covid relief bill.

House Speaker Nancy Pelosi said there’s momentum building toward a compromise fiscal stimulus plan, though Republicans complained about the scale of aid to states included in the bipartisan proposal that’s become the best chance yet for a deal.

“The market is betting that we’ll get a relief package soon,” said Matt Maley, chief market strategist at Miller Tabak + Co. “If anything, this weaker report will get them to agree on a package sooner rather than later.”

Elsewhere, oil climbed as OPEC+ reached an agreement to ease its output cuts next year more gradually than previously planned. Bitcoin declined for the first time in three days after flirting this week with $20,000.

Energy companies led the Stoxx Europe 600 index higher. Asian equities closed mostly higher.

Here are the main moves in markets:

Stocks

The S&P 500 Index climbed 0.9% to 3,699.13 as of 4:01 p.m. New York time, the highest on record.

The Dow Jones Industrial Average rose 0.8% to 30,217.77, the highest on record with the biggest advance in more than a week.

The Nasdaq Composite Index gained 0.7% to 12,464.23, the highest on record.

The Stoxx Europe 600 Index increased 0.6% to 394.04, the highest in more than nine months.

The MSCI All-Country World Index rose 0.7% to 633, the highest on record.

Currencies

The Bloomberg Dollar Spot Index dipped 0.1% to 1,129.43, the lowest in more than two years.

The euro fell 0.1% to $1.2128.

The British pound declined 0.1% to $1.3435.

The Japanese yen weakened 0.3% to 104.17 per dollar, the largest drop in more than a week.

Bonds

The yield on 10-year Treasuries rose six basis points to 0.97%, the highest in more than three weeks.

Germany’s 10-year yield increased one basis point to -0.55%.

Britain’s 10-year yield gained three basis points to 0.351%.

Commodities

West Texas Intermediate crude rose 0.9% to $46.05 a barrel, the highest in nine months.

Gold weakened 0.2% to $1,836.91 an ounce.