Stocks climb to records amid China, deals optimism
U.S. equities climbed to records on optimism over China trade relations and a fresh wave of merger and acquisition activity. The dollar was mixed.
The S&P 500 and Nasdaq Composite Indexes climbed to all-time highs after China said it will tighten intellectual property rules, a move aimed at boosting the chances of a trade deal between the two largest economies. Charles Schwab Corp. agreed to buy TD Ameritrade Holding Corp., while LVMH purchased U.S. jeweler Tiffany & Co.
"The market's momentum is compelling more M&A activity," said David Sowerby, managing director at Ancora Advisors. "That's a validation of the momentum being favorable, that companies are doing deals and acquisitions."
The Stoxx Europe 600 Index advanced, with all 19 industry sectors in the green. Equities climbed across Asia, led by those in Hong Kong, where local elections brought a landslide victory to pro-democracy candidates. The dollar was mixed against most of its major peers and weakened versus the British pound.
While doubts about the rally remain and haven investments such as bonds seem well-supported, stocks globally are approaching a third month of gains. The S&P 500 Index is building on an advance from Friday, when President Donald Trump said he was "very close" to a trade pact, even as Treasuries hold on to most of their two-week surge.
"Markets are relatively optimistic about a phase one trade deal happening, but obviously there's more uncertainty until President Trump and President Xi sit down and sign something more formal," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
Elsewhere, China was planning a record sale of sovereign bonds in dollars, with a potential $6 billion offering, according to people familiar with the discussions. West Texas-grade oil futures drifted. Bitcoin dropped as much as 11% before paring the decline.
These are the main moves in markets:
Stocks:
- The S&P 500 Index advanced 0.7% to 3,130.67 as of 10:44 a.m. New York time, the highest on record with the largest gain in more than a week.
- The Dow Jones Industrial Average advanced 0.5% to 28,018.94, the highest in a week on the biggest gain in more than a week.
- The Nasdaq Composite Index surged 1.2% to 8,620.67, the highest on record with the largest jump in almost six weeks.
- The MSCI All-Country World Index advanced 0.7% to 546.95, the highest in 22 months on the biggest gain in more than a week.
Currencies:
- The Bloomberg Dollar Spot Index was little changed at 1,207.20, hitting the highest in six weeks with its fifth straight advance.
- The euro fell 0.1% to $1.1014, the weakest in more than a week.
- The Japanese yen depreciated 0.2% to 108.89 per dollar, the weakest in almost two weeks on the largest fall in more than a week.
- The British pound jumped 0.5% to $1.2902, the first advance in a week and the biggest increase in two weeks.
Bonds:
- The yield on two-year Treasuries fell one basis point to 1.62%.
- The yield on 10-year Treasuries decreased one basis point to 1.76%.
- Germany's 10-year yield gained one basis point to -0.35%.
- Britain's 10-year yield dipped one basis point to 0.691%, the lowest in more than three weeks.
Commodities:
- Gold depreciated 0.2% to $1,458.76 an ounce, the weakest in almost two weeks.
- West Texas Intermediate crude decreased 0.3% to $57.59 a barrel.
- Copper was little changed at $2.66 a pound.
