(Bloomberg) — U.S. stocks rose to the highest since June 10 on speculation Congress will seek additional stimulus to combat the economic effects of the pandemic and data that showed American manufacturing neared expansion. Oil advanced and the dollar retreated.
The S&P 500 jumped 1% and the Nasdaq Composite hit an all-time high with investors continuing to focus on signs the American economy is bouncing back from the shutdown. Apple, Amazon and Facebook jumped at least 2%. Mohawk Industries, which provides home flooring, Darden Restaurants and Live Nation were among leaders in the S&P 500, even as several states are seeing a sharp increase in virus cases that could lead to further restrictions.
Treasuries were little changed, with the 10-year yielding around 0.71%, 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 $41 a barrel in New York.
Stimulus “puts the bottom on bad news,” said Nela Richardson, an investment strategist at Edward Jones. “Bad news isn’t so bad if we think that that means more stimulus. The markets are responding also to the quick action, quickest in any recession going back to the Great Depression, of the Federal government and monetary authorities, not just in the United States, but around the world.”
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% 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 fueled 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.
Here are some key events coming up:
The IMF will release new 2020 growth projections on Wednesday.U.S. jobless claims, durable goods and GDP data are due Thursday.A rebalance of Russell indexes is due on Friday.
These are the main moves in markets:
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