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Dow Average Hits Record, Bonds Sink on Trade Hopes: Markets Wrap

Stock MarketsNov 04, 2019 10:25AM ET
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(Bloomberg) -- U.S. stocks climbed to records while Treasuries tumbled as trade optimism fueled demand for risk assets.

The Dow Jones Industrial Average jumped 140 points to claim its first all-time high since July, joining the S&P 500 and NASDAQ indexes at fresh superlatives. A report that the U.S. and China are closing in on a partial trade deal provided the latest impetus, after the Federal Reserve cut interest rates last week. The 10-year Treasury yield rose to 1.76% and the dollar advanced versus major peers.

In company news, McDonald’s Corp. (NYSE:MCD) fell after firing its chief executive and Under Armour Inc (NYSE:UAA). sank after disclosing an accounting probe. Carmakers led the Stoxx Europe 600 Index toward a four-year high after the U.S. commerce secretary said tariffs on importing vehicles into the American market might be unnecessary. All major Asian markets advanced. A gauge of emerging-market stocks was set for its biggest gain in three weeks.

Investors are trying to push up stocks for a fifth successive week and add to the 18% gain this year already notched by a global gauge of equities. Earnings continue to roll in around the world, with Uber Technologies Inc (NYSE:UBER) and Marriott International Inc. (NASDAQ:MAR) still due Monday. In China, trade data at the end of this week will give details for October against a backdrop of easing tensions on negotiations with U.S. counterparts.

Commerce Secretary Wilbur Ross expressed optimism the U.S. would reach a “phase one” trade deal with China this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei Technologies Co. President Donald Trump told reporters Sunday a trade deal, if completed, will be signed somewhere in the U.S.

“Everyone is kind of upbeat around the prospect of at least a partial China-U.S. trade deal,” Peter Dragicevich, a strategist at Suncorp Corporate Services, told Bloomberg TV. “It’s going to keep equities pretty supported.”

Elsewhere, crude-oil futures climbed. The initial public offering process for Saudi Aramco officially started on Sunday, with the stock likely to start trading in Riyadh next month. Valuations vary widely.

Here are some key events coming up this week:

  • Earnings are due from companies including: Uber and Marriott International on Monday; Singapore Airlines on Tuesday; SoftBank and BMW on Wednesday; Walt Disney (NYSE:DIS), Toyota, Deutsche Telekom (DE:DTEGn) on Thursday.
  • U.S. durable goods data is due Monday along with factory orders.
  • Regional Fed presidents including Charles Evans, John Williams (NYSE:WMB) and Patrick Harker speak at events on Wednesday.
  • Central bank monetary decisions are due Tuesday in Australia and Thursday by the Bank of England.
These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.6% as of 9:31 a.m. New York time.
  • The Stoxx Europe 600 Index jumped 1.1%.
  • Germany’s DAX Index surged 1.5%.
  • Hong Kong’s Hang Seng Index surged 1.6%.
  • The MSCI Asia Pacific Index jumped 0.6%.
Currencies

  • The Bloomberg Dollar Spot Index increased 0.1%.
  • The euro fell 0.1% to $1.1151.
  • The Japanese yen weakened 0.2% to 108.41 per dollar.
  • South Africa’s rand strengthened 1.6% to 14.8034 per dollar.
Bonds

  • The yield on 10-year Treasuries rose seven basis points to 1.777%.
  • The two-year rate added three basis points to 1.59%.
  • Germany’s 10-year yield rose two basis points to -0.367%.
  • Australia’s 10-year yield gained eight basis points to 1.18%.
Commodities

  • The Bloomberg Commodity Index jumped 0.6%.
  • West Texas Intermediate crude increased 1.5% to $57.02 a barrel.
  • LME copper rose 0.3% to $5,865.50 per metric ton.

Dow Average Hits Record, Bonds Sink on Trade Hopes: Markets Wrap
 

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