Stocks Jump to More Than Month High; Yields Climb: Markets Wrap

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08 Oct 2020, 01:18 PM IST

Stocks Jump to More Than Month High; Yields Climb: Markets Wrap

U.S. President-elect Donald Trump is seen speaking on a television on the floor of the New York Stock Exchange (NYSE). (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) -- Stocks climbed to a more than one-month high on renewed optimism that U.S. lawmakers could still reach an agreement on additional stimulus. Treasuries and the dollar fell.

The S&P 500 gained 1.7% after a barrage of overnight tweets from President Donald Trump advocating a piecemeal approach. Trump sent stocks tumbling late Tuesday by ending talks with Democrats. Speaker Nancy Pelosi signaled openness to a standalone airline relief bill in a conversation with Treasury Secretary Steven Mnuchin on Wednesday.

“The seesaw we’ve seen since yesterday’s plunge is just case and point for the volatility we may encounter as we close in on the election,” said Chris Larkin, managing director of trading and investment product at E*Trade Financial. “That said, with President Trump’s call for aid to airlines, an obviously hard-hit area of the market, traders may be eyeing bullish opportunities.”

Some investors who’ve watched Democratic challenger Joe Biden’s lead in the polls swell in recent days are now speculating that a victory by him would bring an increase of federal spending to boost the economy. Biden leads among likely voters Florida, Iowa and Pennsylvania, Quinnipiac University polls found. Tech stocks also mostly rose, even after a House panel’s proposal late Tuesday for stricter antitrust rules to curb the power of Apple Inc., Alphabet Inc., Facebook Inc. and Amazon.com Inc. The four tech giants account for more than 15% of the S&P 500. Eli Lilly & Co. gained after advances on its Covid-19 antibody drug.

“People are now talking again about this blue wave,” or election sweep by Democrats in Congress and the presidency, said Marc Odo, client portfolio manager at Swan Global Investments. “The one thing we do need is a very clear cut result coming out of this election.”

Minutes of the Federal Open Market Committee’s Sept. 15-16 meeting released Wednesday showed some U.S. central bankers sought further debate on the future of the Federal Reserve’s asset purchase program when they met last month, signaling they’d be open to altering or increasing bond buying going forward.

Meanwhile, with Trump now out of the hospital, investors continue to monitor the virus’s impact on economic recoveries around the world. Signs are mounting the virus is returning to the New York area, with infections reaching three-month highs.

“There is going to be heightened volatility,” said Bryce Doty, senior portfolio manager at Sit Investment Associates. “You have an extraordinary amount of uncertainty between timing of vaccine, when will this current uptick in cases top out.”

Oil fell after U.S. government data showed crude stockpiles increased.

The European Commission, meantime, is close to a deal to procure more of the Covid-19 treatment remdesivir from Gilead Sciences Inc.

Here are some key events coming up:

The U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday

These are some of the main moves in markets:

Stocks

The S&P 500 Index rose 1.7% to 3,419.45 as of 4:07 p.m. New York time, the highest in more than a month.

The Dow Jones Industrial Average gained 1.9% to 28,303.46, the highest in five weeks on the biggest rise in 12 weeks.

The Nasdaq Composite Index increased 1.9% to 11,364.60, the highest in almost five weeks.

The Nasdaq 100 Index climbed 1.9% to 11,503.20.

The Stoxx Europe 600 Index fell 0.1% to 365.45, the first retreat in a week and the largest fall in more than a week.

Currencies

The Bloomberg Dollar Spot Index fell 0.1% to 1,172.49.

The euro rose 0.2% to $1.1763.

The Japanese yen depreciated 0.3% to 105.99 per dollar, the weakest in almost four weeks.

Bonds

The yield on 10-year Treasuries increased five basis points to 0.79%, the highest in almost four months.

The yield on 30-year Treasuries increased five basis points to 1.59%, the highest in four months.

Germany’s 10-year yield gained one basis point to -0.49%, the highest in almost three weeks.

Britain’s 10-year yield rose two basis points to 0.303%, the highest in more than five weeks.

Commodities

West Texas Intermediate crude decreased 1.7% to $39.98 a barrel.

Gold strengthened 0.5% to $1,887.65 an ounce.

Copper climbed 2.1% to $3.03 a pound, the highest in a week.