Stocks rise for second day; Treasury yields drop
Stocks rose and benchmark Treasury yields retreated for a second day amid optimism the economy will continue to benefit from government support.
Technology shares led gains, with the Nasdaq 100 outperforming the benchmark S&P 500. Intel jumped 7% after the chipmaker named a new chief executive. Treasurys received strong demand for a second consecutive day at a government debt sale, helping to send yields down from the highest levels since March.
"Investors continue to focus on growing expectations for increased fiscal spending and promising economic prospects as the vaccine rolls out later this year," said Ryan Nauman, market strategist at Informa Financial Intelligence's Zephyr. "It's all about resiliency here right now and equity markets continue to overlook and not be phased by all the chaos that's out there."
In Washington, the House of Representatives is voting to impeach President Donald Trump for a second time. A Senate trial for Trump probably will not begin before his term ends Jan. 20.
European Central Bank council member Francois Villeroy de Galhau said the ECB will keep an easy stance for as long as needed, and U.S. investors took comfort from remarks by two Federal Reserve officials that pushed back on the possibility of tapering bond purchases anytime soon.
"Coordinated comments from Fed governors" are helping to deflate bond yields, said Deutsche Bank strategists including Jim Reid in a note to clients. "We've only had seven business days this year, and we've already had a full 360-degree tapering debate played out by the Fed."
Europe's Stoxx 600 was flat, with losses in banks and travel shares outweighing M&A announcements. Among the day's winners, French grocer Carrefour rallied after Alimentation Couche-Tard, the convenience-store giant that owns the Circle K chain, said it's exploring a transaction.
In Japan, the Nikkei 225 outperformed, reaching a record in dollar terms. Equities also ticked up in South Korea, while Hong Kong shares were flat.
Oil fell as a stronger dollar and rising refined products supplies offset shrinking U.S. crude supplies, capping the price under a key technical indicator.
Here are some key events coming up:
- JPMorgan Chase & Co., Citigroup and Wells Fargo are among firms due to report earnings.
- President-elect Joe Biden plans to lay out proposals for fiscal support Thursday.
- Federal Reserve Chairman Jerome Powell takes part in a webinar Thursday.
- U.S. initial jobless claims data is due Thursday.
- U.S. retail sales, industrial production, business inventories and consumer sentiment figures are due Friday.
These are some of the main moves in markets:
- The S&P 500 index climbed 0.3%, to 3,809.84, as of 4:02 p.m. New York time.
- The Dow Jones industrial average increased 0.1%, to 31,060.47.
- The Nasdaq Composite index jumped 0.5%, to 13,128.95.
- The Stoxx Europe 600 index rose 0.1%, to 409.07.
- The MSCI All-Country index rose 0.3%, to 661.44.
- The Bloomberg Dollar Spot Index rose 0.2%, to 1,122.79.
- The euro decreased 0.4%, to $1.2157.
- The British pound fell 0.3%, to $1.3634.
- The Japanese yen weakened 0.1%, to 103.87 per dollar.
- The yield on 10-year Treasurys dipped four basis points, to 1.09%, the biggest decrease in five weeks.
- Germany's 10-year yield decreased five basis points, to -0.52%, the largest dip in seven months.
- Britain's 10-year yield fell five basis points, to 0.307%, the first retreat in more than a week and the biggest drop in more than a month.
- West Texas Intermediate crude fell 0.6%, to $52.88 a barrel, the first retreat in more than a week and the largest fall in a week.
- Silver weakened 1.5%, to $25.25 per ounce.