U.S. Stocks Jump on Bank Rise; Dollar Slips on Jobs: Market Wrap

  • Jobs report shows hiring increase with little earnings gains
  • S&P 500 closes within 1 point of all-time high, bonds mixed

Japan's 10-Year Yield Surges

U.S. stocks rose as the Trump administration’s plan to roll back financial regulations sparked a rally in bank shares. The dollar and Treasuries were little changed after a Federal Reserve official’s nod in favor of higher rates countered a jobs report that provided cover for the central bank to maintain its current course.

The S&P 500 Index closed within a point of an all-time high, as lenders jumped almost 2 percent after Donald Trump ordered a review of the Dodd-Frank regulations. The yield on 10-year Treasury notes churned near 2.47 percent, virtually unchanged on the week, after Fed bank of San Francisco President John Williams reiterated that three rate hikes this year is a reasonable guess. Bloomberg’s Dollar Spot Index erased losses on the comments, but couldn’t avoid a sixth weekly slide as the odds for a Fed rate hike in March fell.

Williams comments reversed trades sparked when the latest jobs report showed weak wage growth even as hiring picked up, bolstering the Fed’s case for a gradual approach to tightening. The data capped a week that’s seen monetary policy makers in Japan, the U.K. and the U.S. stand pat as they assess the impact of America’s new leadership on global growth. One of the busiest periods of the earnings season also brought mixed signals, while data show rising confidence among consumers and businesses that American growth is poised to accelerate.

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Stocks

  • The S&P 500 climbed 0.7 percent to 2,297.37 at 4 p.m. in New York, withing a point of its all-time closing record set Jan. 25. Lenders surged 2 percent as Trump signaled his intention to revamp the Dodd-Frank regulatory regime.
  • The Nasdaq Composite Index rose to an all-time high, advancing 0.5 percent.
  • Amazon.com Inc. fell 3.5 percent as its forecast raised concern on spending. Amgen Inc. added 5 percent after earnings topped estimates.
  • Macy’s Inc. surged 6.4 percent after Hudson’s Bay was said to be in takeover talks for the department-store chain.
  • European stocks rose 0.6 percent, paring its drop in the five days to 0.6 percent.
  • The MSCI Emerging Market Index rose 0.6 percent, erasing a weekly loss.

Currencies 

  • The Bloomberg Dollar Spot Index slipped 0.1 percent, capping a 1.2 percent weekly drop. The measure has fallen six straight weeks, the longest slump since August 2010.
  • The pound weakened 0.4 percent to $1.2477, while the euro slipped by 0.2 percent.
  • Russia’s ruble strengthened 0.7 percent after the central bank left its key rate unchanged and said the potential for a cut in the first half of the year has diminished.

Bonds

  • The yield on 10-year U.S. Treasuries was little changed at 2.48 percent Friday, virtually where it ended a week ago.
  • The yield on German bonds due in a decade added one basis point to 0.43 percent, while similar-maturity debt yields of France, Spain and Italy rose at least three basis points.

Commodities

  • Oil headed capped a third weekly gain as OPEC reached about 60 percent of its output-cut target and the U.S. slapped new sanctions on Iran after a missile test. West Texas Intermediate crude advanced 0.5 percent to settle at $53.83 a barrel.
  • Gold added 0.1 percent to $1,220.80 an ounce, for a weekly increase of 2.5 percent as political risk spurred demand for a haven.
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