U.S. stocks jump, send Nasdaq higher for the year

Monday , February 12, 2018 - 2:10 PM

Kailey Leinz and Sarah Ponczek

(c) 2018, Bloomberg.

U.S. stocks surged, with financial markets showing signs of recovery after the worst week in two years for American equities.

The 10-year yield fell back from the four-year high hit earlier Monday as the dollar slipped. The Nasdaq Composite Index turned positive for 2018, with the Dow Jones Industrial Average and the S&P 500 now down less than 1 percent since the end of December. Stocks and bonds have been in a tug-of-war since a blowout jobs report early this month sent Treasury yields spiking, raising the specter of higher interest rates to come.

The Cboe Volatility Index fell as the S&P posted its biggest two-day advance in 18 months, but traders were still on edge following the tumultuous move in equities last week that wiped $2 trillion from U.S. stocks. Investors are awaiting U.S. consumer-price data due Wednesday with some trepidation, given that pressure on equities has been emanating from the Treasury market and the outlook for inflation.

“You just had a major reversal and investors are just taking a deep breath,” said Mike Bailey, the director of research at FBB Capital Partners in Bethesda, Maryland. “People said, ‘OK, the 10 percent correction is over, let’s take a look at the bright side."‘

The S&P 500 retook its 100-day moving average, a technical indicator that it crashed through last week. Morgan Stanley chief U.S. equity strategist Michael Wilson reversed his week-old cautious call, joining peers at Goldman Sachs Group Inc. and JPMorgan Chase & Co. who have told clients to buy the dip.

European and Asian equities also rose Monday, while the dollar’s slide supported commodities, with metals rallying and crude oil slightly higher after a six-day selloff.

The won outperformed major currencies after Vice President Mike Pence told The Washington Post the U.S. is ready to engage in talks about North Korea’s nuclear program, signaling a shift in policy. South Africa’s rand strengthened on speculation President Jacob Zuma is poised to leave office.

These are the main moves in markets:

- The S&P 500 Index rose 1.4 percent at the close of trading in New York

- The Stoxx Europe 600 Index climbed 1.2 percent.

- The MSCI All-Country World Index added 1.2 percent, the most since April.

- The U.K.‘s FTSE 100 Index rose 1.2 percent.

- The Bloomberg Dollar Spot Index dipped 0.3 percent.

- The euro rose 0.3 percent to $1.229.

- The British pound was little changed at $1.3834.

- South Africa’s rand climbed 0.5 percent to 11.93 per dollar.

- The yield on 10-year Treasuries was little changed at 2.85 percent.

- Germany’s 10-year yield rose one basis point to 0.75 percent.

- Britain’s 10-year yield rose three basis points to 1.6 percent.

- West Texas Intermediate crude added 0.2 percent to $59.33 a barrel, the first advance in more than a week.

- Gold rose 0.5 percent to $1,322.74 an ounce for the largest advance in two weeks.

- Copper futures climbed 1.7 percent for the first advance in five days.

- With assistance from Elena Popina Ruth Carson Andreea Papuc Eddie van der Walt Todd White Christopher Anstey and Lu Wang

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