U.S. stocks rose for a second day ahead of data that’s expected to show the economy extended its recovery from the virus-induced contraction. Treasuries and the dollar retreated.
The S&P 500 pushed to a two-week high with investors continuing to focus on signs the American economy is bouncing back from the shutdown. Investors remain on edge over tension with China after a wild overnight session that saw futures plunge after a White House adviser said the trade deal was over. They rebounded when after President Donald Trump contradicted the statement.
The Dow Jones Industrial Average rose 134.43 points, or 0.52 per cent, at the open to 26,159.39. The S&P 500 opened higher by 20.84 points, or 0.67 per cent, at 3,138.70. The Nasdaq Composite gained 74.35 points, or 0.74 per cent, to 10,130.83 at the opening bell. The Toronto Stock Exchange’s S&P/TSX composite index was up 147.06 points, or 0.95 per cent, at 15,663.96.
Treasuries fell, pushing the 10-year yield to 0.71 per cent, while the dollar dropped for a second day. Equities rose in Europe and in Asia. Gold continued its push toward the highest level since 2012 and oil topped US$41 a barrel in New York.
Carmakers and banks led a broad advance in the Stoxx Europe 600 index after positive economic data in the euro area. Bayer AG rose more than 7 per cent after a report that the company is close to resolving the litigation over its Roundup weedkiller. The euro strengthened and yields ticked higher on core European bonds.
Investors are betting that trillions of dollars in stimulus by central banks and governments around the globe will shield economies from a resurgence in virus breakouts. PMIs for June, due Tuesday, may show business activity in the world’s largest economy continuing a rebound that started in May.
While euro-area PMI gauges earlier fuelled a risk-on mood, they also underlined some of the pressures that a long and slow recovery would impose on companies struggling with weak demand.
Anthony Fauci, the U.S.’s top infectious-disease doctor, warned Tuesday that the coronavirus isn’t taking a summer break, judging from its persistent spread in the U.S. Sun Belt. A German state locked down a municipality where 1,553 workers tested positive at a single meat factory.