Stocks gain amid deals optimism; dollar weakens
U.S. stocks rose for a second day amid a flurry of deal activity and signs of progress toward a coronavirus vaccine. The dollar weakened and Treasurys were little changed.
Oracle Corp. jumped 4.3% on reports the company beat Microsoft Corp. in negotiations for the U.S. operations of TikTok. Immunomedics Inc. almost doubled after Gilead Sciences Inc. agreed to buy the cancer drugmaker for $21 billion.
The S&P 500 touched a week high before paring gains, while the Nasdaq 100 Index broke a two-day slide. Pfizer Inc. Chief Executive Officer Albert Bourla said it's "likely" the U.S. will deploy a covid-19 vaccine to the public before year-end.
"I know that we're in the middle of a pandemic, but the reality is that the current economic environment has typically been very good for M&A activity," said Jim Paulsen, chief investment strategist at Leuthold Group.
Global stocks are coming off the back of the first consecutive weeks of declines since March and traders remain on edge given the recent reassessment of valuations and volatility in options markets. The Federal Reserve is expected this week to maintain its dovish stance on policy as investors look for signs the global economy is recovering from the pandemic. Strategists at Goldman Sachs Group Inc. and Deutsche Bank AG suggested the recent pullback in the U.S. is nearing an end.
"The path of least resistance is up," said Kevin Caron, portfolio manager for Washington Crossing. "We still have a lot of monetary stimulus in the pipeline, there's still a decent amount of momentum in the market, the underlying data in earnings seem to be reasonably positive."
The pound strengthened against peers as Prime Minister Boris Johnson faced a rebellion in Parliament against legislation that would override key elements of the divorce treaty signed with the European Union.
In Asia, stocks rallied with South Korea leading gains. SoftBank Group Corp. shares climbed after Nvidia Corp. agreed to buy the firm's chip division Arm Ltd. for $40 billion.
These are the main moves in markets:
Stocks
The S&P 500 Index gained 1.3% to 3,383.45 as of 4 p.m. EDT.
The Dow Jones industrial average increased 1.2% to 27,992.38, the highest in more than a week.
The Nasdaq Composite Index climbed 1.9% to 11,056.65.
The Nasdaq 100 Index advanced 1.7% to 11,277.76.
Currencies
The Bloomberg Dollar Spot Index declined 0.3% to 1,165.64, the lowest in more than a week.
The euro increased 0.2% to $1.1864, the strongest in almost two weeks.
The Japanese yen appreciated 0.4% to 105.70 per dollar, the strongest in more than two weeks on the largest gain in more than two weeks.
The British pound advanced 0.5% to $1.2855, the biggest gain in more than two weeks.
Bonds
The yield on 10-year Treasurys advanced one basis point to 0.67%.
The yield on 30-year Treasurys gained one basis point to 1.42%.
Germany's 10-year yield increased less than one basis point to -0.48%.
Commodities
West Texas Intermediate crude declined 0.1% to $37.29 a barrel.
Gold strengthened 0.9% to $1,958.15 an ounce, the highest in almost two weeks on the largest gain in more than two weeks.
Copper advanced 0.9% to $3.07 a pound, the highest in more than two years.
