Stocks Rise on Economy Optimism as Dollar Slips: Markets Wrap
(Bloomberg) U.S. stocks rose within striking distance of records amid optimism economic growth can continue apace even as the world’s two largest economies square off in a trade skirmish. The dollar slid the most in two weeks. The S&P 500 Index hit the highest level since Jan. 29 and the Cboe Volatility Index dipped below 11 for the first time since May. Miners lifted the Stoxx Europe 600 Index as commodities advanced. Chinese stocks led a broad rally in Asia, with the Shanghai Composite Index posting its biggest gain in two years on hopes for more policy support for investment.The gains in emerging-market equities overshadowed rising woes in Turkey, where the yield on the country’s 10-year bonds touched a record high amid a diplomatic spat with the U.S. The lira clawed its way back from a record low, only to later give up some gains.
As earnings season enters its final phase, most major U.S. companies have now reported and about four out of five have surprised to the upside. That’s pushed the S&P 500 within 25 points of a record, even as investors fret over the escalating trade war between America and China. Meanwhile, geopolitical concerns linger in the background, including confusion about the status of negotiations intended to lead to the denuclearization of the Korean peninsula and the Trump administration’s restoration of some U.S. sanctions on Iran.
Elsewhere, crude climbed after Saudi Arabian production cuts added to concern about tightening worldwide supplies. Gold advanced with industrial metals. European sovereign bonds were mostly lower, with Italian notes rising. The yen strengthened after Reuters reported that the Bank of Japan had considered raising interest rates this year. Germany’s industrial production fell more than expected in June, but the euro strengthened after a recent run of losses.