U.S. stocks rise with treasuries, oil plunges
U.S. stocks rose after a mixed overnight session, as investors saw glimmers of optimism in health-care efforts to deliver rapid virus testing. The dollar rose.
The S&P 500 Index climbed for the fourth time in five days even after a weekend full of negative pandemic news, including President Donald Trump's abrupt order to extend recommendations aimed at inhibiting the spread. Health-care shares were among the biggest gainers as Abbott Laboratories surged after unveiling a five-minute coronavirus test and Johnson & Johnson announced a vaccine candidate for the virus.
Crude fell more than 6% after briefly paring losses when Trump said he plans to speak with Russia's Vladimir Putin about crude. Shares in Europe were mixed after declines across much of Asia. The dollar was on course to snap a four-session losing streak.
Pessimism returned to credit markets. Brent crude extended recent losses and was set for its worst month in history, down about 54%. Gold and silver both dipped.
Investors are beginning the week hearing that the biggest economy will stay crippled for longer after Trump heeded advice from the government's top doctors that re-opening the U.S. in two weeks risks greater loss of life as the coronavirus outbreak accelerates. The president said in a news conference "social distancing" guidelines would remain until at least April 30, while his top infectious-disease expert said 100,000 to 200,000 may die.
"I do think that we're going to continue to see volatility. Whatever has happened with equity markets, the VIX has stayed at very elevated levels," Fabiana Fedeli, global head of fundamental equities at Robeco, said by phone. "We're going to have a lot of news flow and some of it will be negative -- it could be concerns over the outbreak, it could be concerning the balance sheets of companies. And there will also be positive news as well."
In the latest stimulus moves, China's central bank lowered short-term funding rates and injected cash into its financial system, Australia announced a job-support program and limited public gatherings to just two people, while Singapore unveiled an unprecedented easing in policy.
Elsewhere, Australian shares were the notable exception to broad declines, with the equity benchmark surging by a record thanks to the new stimulus measures. Emerging currencies including South Africa's rand and Mexico's peso tumbled amid concern about debt downgrades.
Quarter-end strains could add to investor nervousness on Monday and Tuesday as financial firms rein in collateral lending to shore up balance sheets, while Japanese banks face their fiscal year-end. The MSCI gauge of global equities is down about 23% since the start of the year, on course for its worst quarter since the end of 2008.
These are the main moves in markets:
Stocks:
- The S&P 500 Index climbed 1% as of 10:04 a.m. in New York.
- The Dow Jones Industrial Average rose 0.1%.
- The Stoxx Europe 600 Index advanced 0.1%.
- The MSCI Asia Pacific Index dipped 0.8%.
Currencies:
- The Bloomberg Dollar Spot Index jumped 1%.
- The euro declined 1% to $1.103.
- The British pound decreased 0.3% to $1.242.
- The Japanese yen fell 0.2% to 108.16 per dollar.
Bonds:
- The yield on 10-year Treasuries decreased four basis points to 0.62%.
- Germany's 10-year yield dipped six basis points to -0.54%.
- Britain's 10-year yield fell five basis points to 0.316%.
Commodities:
- Gold fell 0.4% to $1,647 an ounce.
- West Texas Intermediate crude decreased 6.9% to $20.03 a barrel.
