Stocks in China slide; U.S. equity futures advance
U.S. stocks rallied following steep losses Friday as investors speculated the American economy is robust enough to withstand the fallout from the cornoavirus. Shares plunged in China in a catch-up move as markets there reopened after a long holiday.
The S&P 500 Index bounced back from the worst week in six months, with major averages pushing higher after manufacturing data topped estimates. Shares in Shanghai -- which hadn't traded since holidays began Jan. 23 -- tumbled the most since 2015 as the nation's economy remained virtually shut down because of the virus. The Stoxx Europe 600 Index rose as support measures from China's government helped stem losses in other markets.
Technology and consumer shares paced gains in the U.S. Tesla Inc. rallied above $700 a share, while Gilead Sciences Inc. climbed with China preparing to test one of the company's new anti-viral drugs. Treasuries sank. Energy producers slid with the price of oil. The offshore yuan weakened to more than 7 per dollar. The dollar gained.
Investors shifted gears on Monday after global equities sank in their worst week since August on concern economies will falter as the virus spreads. The People's Bank of China cut rates as it injected cash into the financial system on Monday, part of a slew of measures to shore up their financial markets. Still, the economic toll is becoming clearer, with Beijing reportedly evaluating whether its growth target this year should be softened. A manufacturing reading in the U.S. topped estimates.
"It continues to be just a big unknown, but the U.S. goes into this with accelerating growth. We go into this in pretty good shape, it's not like we were slowing," Jim Paulsen, Leuthold Group Inc.'s chief investment strategist, said by phone. "Typically these things don't last forever. "They're going to hit China really hard in the first quarter, but maybe it's pretty much wound up by then."
Elsewhere, the pound slid on fears of a new cliff edge in trading arrangements between Britain and the European Union. Copper futures in London halted 13 sessions of declines.
Norway's krone fell to a three-month low versus the euro after the nation's manufacturing PMI data came in weaker than expected and on news of a drop in China's oil demand.
These are the main moves in markets:
Stocks:
- The S&P 500 Index increased 1.1% as of 11:01 a.m. New York time.
- The Nasdaq 100 Index gained 1.5%.
- The Stoxx Europe 600 Index advanced 0.4%.
- The MSCI Emerging Market Index lost 0.1%.
Currencies:
- The Bloomberg Dollar Spot Index advanced 0.3%.
- The British pound decreased 1.5% to $1.3014.
- The euro declined 0.3% to $1.1057.
- The Japanese yen weakened 0.2% to 108.51 per dollar.
- The offshore yuan weakened 0.2% to 7.0147 per dollar.
Bonds:
- The yield on 10-year Treasuries gained four basis points to 1.55%.
- Germany's 10-year yield climbed one basis point to -0.43%.
- Britain's 10-year yield advanced one basis point to 0.529%.
Commodities:
- West Texas Intermediate crude fell 0.9% to $51.05 a barrel.
- Gold futures weakened 0.5% to $1,579.70 an ounce.
- LME copper climbed 0.4% to $5,587.50 per metric ton.
