U.S. Stocks gain most in almost four weeks; Yields rise, dollar weakens

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October 6, 2020 10:44 AM

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all rebounded from Friday’s swoon in the wake of Trump’s coronavirus disclosure.

sensex, niftygold

Bloomberg: U.S. stocks closed at the highest levels of the day amid optimism that President Donald Trump will leave the hospital and lawmakers will move closer to providing more stimulus. Treasury yields jumped and the dollar weakened.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all rebounded from Friday’s swoon in the wake of Trump’s coronavirus disclosure. Regeneron Pharmaceuticals Inc. rallied after Trump was given an experimental antibody treatment made by the drugmaker. Energy, health care and technology shares were the biggest gainers in the S&P, pushing the benchmark index up by the most in almost four weeks.

“Investors are likely running with the idea that recent data and President Trump’s firsthand experience with the virus increases the odds of another fiscal package,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. “It is becoming harder to deny the need for additional fiscal support.”

Trump said on Twitter that he’ll leave Walter Reed hospital Monday evening after being treated since Friday for Covid-19. With less than a month until Election Day, Trump’s hospitalization has jolted the presidential campaign, forcing him to scrap rallies and other events as polls show him trailing Joe Biden nationally and in swing states.

On the stimulus front, Trump tweeted from the hospital that a deal needs to get done. House Speaker Nancy Pelosi was optimistic on Friday that a bipartisan stimulus bill can be done.

“Absent of vaccine breakthrough, we’re in an economy that is modestly recovering from the lows of March and April, but it can only go so far,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management’s Ascent Private Wealth Group. “Areas of the economy that are susceptible are still feeling the pain. That’s why we need so much stimulus from the Federal Reserve and Congress.”

Traders also pointed to polls suggesting a stronger lead for Biden and the possibility that a clear winner will emerge from the Nov. 3 election. U.S. markets have been nervous in recent weeks about a close election and the risk of a long and messy legal battle.

Elsewhere, consumer companies and banks led a broad advance among European stocks. Equities in Asia notched gains, while crude oil rebounded from a three-week low and gold advanced.

Here are some key events coming up:

  • The Reserve Bank of Australia is forecast to keep interest rates and its three-year yield target unchanged at 0.25% on Tuesday
  • Also Tuesday, Fed Chair Jerome Powell and ECB Chief Economist Philip Lane deliver keynote addresses at the NABE conference
  • On Wednesday, the minutes of the Sept. 15-16 meeting of the FOMC could be especially fruitful for Fed watchers, beginning with details of the debate on conditions necessary to trigger a rate increase
  • The U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday
  • Though the final formal round of talks is over, the British government expects trade negotiations to continue up to the EU summit in mid-October.

These are the main moves in markets:

Stocks

The S&P 500 Index climbed 1.8% to 3,408.56 as of 4:01 p.m. New York time, the highest in a month on the largest increase in almost four weeks.

The Dow Jones Industrial Average surged 1.7% to 28,148.18, the highest in more than a month on the biggest jump in almost 12 weeks.

The Nasdaq Composite Index climbed 2.3% to 11,332.48, the highest in more than a month on the largest increase in almost four weeks.

The Nasdaq 100 Index gained 2.3% to 11,509.06, the biggest rise in more than a week.

The Stoxx Europe 600 Index rose 0.8% to 365.63, the highest in more than two weeks on the largest advance in a week.

Currencies

The Bloomberg Dollar Spot Index sank 0.4% to 1,169.13, the lowest in more than two weeks on the biggest dip in more than five weeks.

The Japanese yen depreciated 0.5% to 105.77 per dollar, the weakest in more than three weeks on the largest decrease in five weeks.

The euro climbed 0.6% to $1.1783, the strongest in more than two weeks.

Bonds

The yield on 10-year Treasuries climbed seven basis points to 0.78%, the highest in almost four months on the largest surge in a month.

The yield on 30-year Treasuries climbed nine basis points to 1.58%, reaching the highest in almost four months on its sixth straight advance and the biggest surge in a month.

Germany’s 10-year yield increased three basis points to -0.51%, the highest in more than a week on the largest climb in more than three weeks.

Britain’s 10-year yield rose four basis points to 0.288%, the highest in almost five weeks.

Commodities

West Texas Intermediate crude surged 6.2% to $39.36 a barrel, the largest jump in 20 weeks.

Gold strengthened 0.6% to $1,911.48 an ounce, the highest in two weeks.

Copper declined 0.4% to $2.97 a pound.

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