Tech Rally Powers Best Stock Surge Since January: Markets Wrap

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U.S. stocks jumped the most in six weeks as chipmakers rallied on deal news and the latest retail-sales data boosted confidence that the economy isn’t headed for a downturn. Treasuries slipped.

The S&P 500 surged past its 200-day moving average, while the Nasdaq 100 jumped more than 2 percent amid an Apple upgrade. Nvidia agreed to buy a competitor, sending the Philadelphia Semiconductor index to its biggest gain in a month. The Dow Jones Transportation Average stopped the longest string of drops since 1972. Boeing retreated after some airlines grounded 737 Max flights following a crash Sunday. It is the biggest component of the price-weighted Dow Jones Industrial Average and the only of the 30 blue chips to retreat.

Stocks are coming off the worst week since December after a slew of negative news about the global economy, including a weak American jobs report and a sharp dovish turn by the European Central Bank. The S&P 500 failed to hold above 2,800 -- a level that has capped prior rallies -- and its decline accelerated after it slid through the average price over the past 200 days.

“With retail sales coming out this morning, that provided the catalyst to move stocks upward,” Kristina Hooper, chief global market strategist at Invesco Ltd., said in an interview at Bloomberg’s New York headquarters. “Certainly, M&A activity never hurts in terms of creating some positive sentiment for stocks. So it’s been a nice relief rally after what was a relatively dark week for stocks last week.”

A slew of data releases this week will be closely watched for clues on growth and the impact of central bank policy in the U.S., European Union and China, with the Bank of Japan the next to meet. On the trade front, Beijing and Washington are in general agreement on many crucial issues and have held meaningful discussions on foreign exchange, People’s Bank of China Governor Yi Gang said.

“We’ve had a bit of a pullback in this market -- one of the bigger ones all year,” Jim Paulsen, chief investment strategist at the Leuthold Group, said in an interview. “It looks like buying on the dip more than anything else. There’s been a lot of money waiting on the sidelines.”

Europe’s benchmark stock gauge rose the most in three weeks. In Asia, Chinese shares outperformed, paring some of Friday’s losses, with stocks in Japan and Hong Kong also higher. Treasuries declined with most European sovereign bonds. In Norway, the krone strengthened as surging inflation increased the odds of a rate hike next week.

Elsewhere, oil prices climbed as Saudi Arabia extended deeper-than-agreed production cuts into a second month. The pound gained as another key Brexit vote looms in parliament on Prime Minister Theresa May’s revised deal. Turkey’s lira edged higher even as the country entered its first recession in a decade.

Here are some key events coming up:

• Chinese retail sales and industrial production data are all scheduled for release this week. The National People’s Congress is set to wrap up with a speech on Friday from Premier Li Keqiang.
• U.K. House of Commons votes Tuesday on May’s revised Brexit deal, 20 days before Britain is scheduled to leave the EU.
• Bank of Japan Governor Haruhiko Kuroda will speak on Friday, after he and his board meet to decide on monetary policy.

These are the latest moves in markets:

Stocks

• The S&P 500 rose 1.5 percent at 4 p.m. in New York.
• The Dow average added 0.8 percent and the Nasdaq 100 climbed 2.1 percent.
• The Stoxx Europe 600 Index increased 0.8 percent.
• The MSCI Asia Pacific Index jumped 0.7 percent, the largest climb in two weeks.
• The MSCI Emerging Market Index rose 1.1 percent, the biggest increase in two weeks.

Currencies

• The Bloomberg Dollar Spot Index slipped 0.1 percent.
• The euro was little changed at $1.1244.
• The Japanese yen fell 0.1 percent to 111.26 per dollar.
• The MSCI Emerging Markets Currency Index jumped 0.2 percent.

Bonds

• The yield on 10-year Treasuries increased one basis point to 2.64 percent, the first advance in more than a week.
• The two-year yield rose one basis point to 2.475 percent.
• Germany’s 10-year yield decreased less than one basis point to 0.06 percent, the lowest in more than two years.

Commodities

• The Bloomberg Commodity Index dipped 0.3 percent to the lowest in three weeks.
• WTI crude rose 1.3 percent to $56.77 a barrel, the largest advance in a week.
• Gold fell 0.5 percent to $1,292.15 an ounce, the largest drop in a week.

--With assistance from Nancy Moran, Adam Haigh, Eddie van der Walt and Brendan Walsh.

To contact the reporters on this story: Reade Pickert in New York at epickert@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Yakob Peterseil

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