U.S. Stocks Rise as Rout Eases; Bonds, Gold Climb: Markets Wrap

  • Financials erase 1 percent slide to trade little changed
  • Oil trim losses with emerging assets as tech shares raly

JPMorgan's Gartside Says U.S. Had Very Mini Correction

U.S. stocks rebounded after the first 1 percent decline since October, while havens from Treasuries to the yen remained in demand as investors assessed the prospects for pro-growth policies in America.

The S&P 500 Index edged higher, while technology-heavy measures posted solid advances. Banks slipped to an eight-week low after bearing the brunt of Tuesday’s rout. Treasury 10-year yields fell to 2.40 percent, the yen surged versus all its G-10 peers and gold rose toward $1,250 an ounce. Bloomberg’s dollar measure fell a sixth day, its longest slump since November. New Zealand’s central bank held its benchmark rate steady.

The gains in U.S. equities provided a measure of calm to the market, though havens remained in demand a day before a Republican health-care bill is set for a vote in Congress. Lawmakers have signaled any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Donald Trump’s election. The depth of selling Tuesday drew some investors back in on speculation the drop went too far given data showing strength in the global economy.

“Everyone has been waiting for a dip for so long that when you get some kind of a dip, for not just tech but large-cap value too, it’s one of those opportunities to buy in,” said Mariann Montagne, a portfolio manager at Gradient Investments LLC, which oversees about $1.4 billion. “Maybe people are seeing a cue that things aren’t deteriorating across tech land. The deterioration of tech wasn’t due to fundamentals, it was just a function of pricing.”

Read our Markets Live blog here.

What’s coming up the rest of this week:

  • The U.S. Federal Reserve speakers just keep coming, and as you’d expect Janet Yellen’s appearance on March 23 will attract most attention.
  • The timing of the House of Representatives vote Thursday has not been set, with reports differing on whether the Republicans can marshal enough support to pass the measure.
  • Central bank policy decisions are expected in New Zealand, the Philippines and Sri Lanka.
  • March PMI and final fourth-quarter GDP figures for France are due Friday.

Here are the main moves in markets:

Stocks

  • The S&P 500 added 0.2 percent to 2,348.50 at 4 p.m. in New York, after earlier falling as much as 0.3 percent. The measure notched on Tuesday its first 1 percent decline since October.
  • The Nasdaq 100 Index jumped 0.7 percent, while small caps in the Russell 2000 Index fell 0.1 percent.
  • Financial shares slid 0.1 percent following a 2.9 percent rout Tuesday.
  • The Stoxx Europe 600 Index fell 0.4 percent, the biggest decrease in about a month.
  • The FTSE 100 Index slid 0.7 percent, holding its level after London’s worst terror attack in more than a decade left four people dead.
  • The MSCI Emerging Market Index fell 0.5 percent in its first retreat in almost two weeks.

Currencies

  • The Bloomberg Dollar Spot Index dropped 0.2 percent, headed for a sixth straight loss..
  • The British pound was little changed at $1.2487, showing scant reaction to the attacks in London.
  • The Japanese yen rose 0.5 percent to 111.136 per dollar, hitting the strongest in about four months with its seventh straight increase.

Bonds

  • The yield on 10-year Treasuries declined two basis points to 2.39 percent, the lowest in more than three weeks.
  • Gilts advanced, sending the 10-year yield lower by eight basis points.
  • France’s 10-year yield fell five basis points to the lowest in a week. Germany’s also dropped five basis points.

Commodities

  • Brent took center stage in the oil market after dipping below $50 for the first time this year. It pared losses to trade 0.4 percent lower at $50.73 a barrel.
  • West Texas Intermediate oil settled at $48.04, dropping for a third day as data showed U.S. crude supplies climbed.
  • Gold capped a sixth straight gain in its longest run since the U.K. vote to leave the European Union. Futures for April delivery gained 0.3 percent to settle at $1,249.70.
  • Iron ore futures on the Dalian Commodity Exchange sank into a bear market as steel in Shanghai posted the longest run of declines this year.

— With assistance by Sid Verma, Richard Richtmyer, and Samuel Potter

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