U.S. stocks gain in heavy volume; Treasuries climb
U.S. stocks gained in a flood of trading caused by expiring options and futures contracts. Treasuries rose and the dollar halted its rally as investors studied unprecedented government measures to shield jobs and economies from the coronavirus pandemic.
The S&P 500 headed for its first two-day advance since mid-February as the Federal Reserve coordinated action with global central banks to beef up dollar liquidity swap line arrangements. Trading was almost double the 30-day average for the time of day. Tech stocks rose as bottom feeders bet on a rebound. Markets gained in Asia and Europe, cutting the weekly drop for stocks worldwide to just under 10%.
The 10-year Treasury yield headed for its lowest closing level since Monday. The dollar weakened against its major peers after vaulting more than 8% in the previous eight sessions. The pound, Australian dollar and South Korean won all leaped versus the greenback. WTI oil slumped after Thursday's surge.
Investors are weighing a faster pace of coronavirus infections against flickers of optimism that have followed extraordinary government actions, from plans for stimulus and cash handouts to nationalizing companies. Hedge funds, stock exchanges, banks and even brick-and-mortar businesses in the U.S. are lobbying Washington policy makers not to shut markets.
The turmoil across assets does seem to be easing, even after the World Health Organization said that the pace of infections is speeding up. Cases doubled to 200,000 in the 12 days through Thursday, but just one day later the tally already was almost halfway to 300,000.
"We are now starting to lean into risk," Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, told Bloomberg TV. "The tail of this is going to be potentially somewhat more extended than what the overall market thinks, so we're not going to get back to business as usual for the next three months, but the policy backdrop across the globe will help soften the blow."
These are the main moves in markets:
Stocks:
- The S&P 500 Index rose 1.3% at 10:34 a.m. New York time; the Nasdaq Composite added 2.3%.
- The Stoxx Europe 600 Index rose 3%.
- The MSCI Asia Pacific Index surged 3.1%.
Currencies:
- The Bloomberg Dollar Spot Index dipped 1%.
- The euro advanced 0.4% to $1.0732.
- The British pound climbed 3.4% to $1.1877.
- The Japanese yen slipped 0.1% to 110.8 per dollar.
Bonds:
- The yield on 10-year Treasuries dipped 13 basis points to 1.01%.
- Germany's 10-year yield fell 10 basis points to -0.31%.
- Britain's 10-year yield decreased 17 basis points to 0.54%.
Commodities:
- Gold gained 1.7% to $1,496.28 an ounce.
- West Texas Intermediate crude fell 5.6% to $23.82 a barrel.
