U.S. Stocks, Dollar Advance on Growth Optimism: Markets Wrap

  • Gasoline surges as Harvey makes second landfall on Gulf coast
  • Dollar rebounds from lowest level in more than two years

Reinhart Says 3% GDP Growth Is Not Sustainable

U.S. stocks rose for a fourth day and the dollar strengthened after data bolstered optimism that the American economy is on firm footing. Gasoline spiked to the highest in two years as Harvey relentlessly pounded the energy-rich Gulf coast.

The S&P 500 Index pushed above its average price for the past 50 days, overcoming early weakness sparked by a Twitter post from President Donald Trump on North Korea. European stocks gained with Asian shares on optimism that the anxiety after a missile launch this week was receding. Treasuries rose, while the greenback advanced versus most major peers.

“It doesn’t strike me that the market is extremely nervous here,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “I think as time goes on these kind of tweets have less and less impact on the market.”

Investors focused on data showing U.S. second-quarter growth reached the fastest pace in two years on stronger household spending and a bigger gain in business investment. A private report on payrolls indicated robust hiring this month two days before government jobs data will be scoured for clues on the timing of the Federal Reserve’s next rate move.

“We know what the Federal Reserve will be doing in September,” said Vincent Reinhart, chief economist and investment strategist at Standish Mellon Asset Management in Boston. “The only game is town is what you think the Federal Reserve will do in December.”

After drenching Texas, Tropical Storm Harvey regained strength over the waters of the Gulf of Mexico and crashed ashore again Wednesday in southwest Louisiana, according to the National Hurricane Center. The storm has already knocked out a fifth of the nation’s refining capacity.

Terminal subscribers can read more on our Markets Live blog.

Among other key events looming this week:

  • Currency traders will be looking for a statement of independence from South African Reserve Bank Governor Lesetja Kganyago today when he speaks on the central bank’s role.

And here are the main moves in markets:


Stocks

  • The S&P 500 Index rose 0.5 percent as of 4:03 p.m. in New York.
  • The Nasdaq 100 Index jumped 1.1 percent, while the Dow Jones Industrial Average edged 0.1 percent higher.
  • The U.K.’s FTSE 100 Index rose 0.4 percent, recovering from the biggest drop in almost three weeks on a closing basis.
  • Germany’s DAX Index gained 0.5 percent

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4 percent, recovering from the lowest in more than two years.
  • The euro dropped 0.7 percent to $1.1886, after touching the strongest in almost three years on Tuesday.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.14 percent, while the two-year note yield increased one basis point to 1.33 percent.
  • Germany’s 10-year yield rose two basis points to 0.36 percent.

Commodities

  • West Texas Intermediate crude fell 1 percent to $45.96 a barrel.
  • Gold was little changed at $1,308.10 an ounce.
  • Gasoline for September delivery rose 6.3 percent to $1.8964 a gallon.
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