Bloomberg News - U.S. Stocks Maintain Strong Streak as Europe Rises: Markets Wrap

U.S. stocks climbed in early trading, as investors looked past concerns that a strong economy may accelerate the removal of monetary stimulus.

The Dow Jones Industrial Average and S&P 500 Index both rose Wednesday, following the previous session’s late surge. Wynn Resorts Ltd. and Ball Corp. were among the biggest gainers in the S&P, countering a drop in Chipotle Mexican Grill. Chipmakers weighed on the Nasdaq 100 Index. Treasuries rose, pinning the 10-year yield below 2.80 percent, while the dollar advanced. The Cboe Volatility Index, a measure of market anxiety, dropped 27 percent.

A lingering issue for bulls is the wisdom of doing what they always do -- buy the dip -- when more selling by speculators may be imminent after Monday’s break in volatility markets. Accounts of losses and liquidations at hedge funds specializing in the asset class were rife Wednesday morning even as Wall Street strategists urged investors to consider the market’s solid underpinning in economic growth and earnings.

“Even a little bit of volatility is fine as long as we don’t start suddenly taking bigger swings,” said Peter Jankovskis, co-chief investment officer of Oakbrook Investments LLC. “The key thing to me is that the wave is dampening relative to where we were a couple days ago. It obviously takes a while for everybody’s nerves to calm down at once, but we’re moving in the right direction.”

The S&P 500 is coming off its best day in 15 months, as buyers pored over the wreckage from Monday’s 4.1 percent rout. European equities halted a seven-day slide to join the rebound, rising the most in six weeks. Asia’s bid for a recovery faltered late in that session, with the MSCI Asia Pacific Index almost completely erasing a gain of as much as 2.4 percent.

In commodities, gold was little changed, while West Texas intermediate crude climbed and copper dropped. Bitcoin traded above $8,000.

• Monetary policy decisions are due this week in Russia, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines.
• Earnings season continues with reports from Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter.
• New York Fed President William Dudley and Dallas Fed President Robert Kaplan are among policy officials due to speak.

Terminal users can read more in our markets blog.

These are the main moves in markets:

Stocks

• The S&P 500 Index gained 0.3 percent as of 10:06 a.m. in New York.
• The Stoxx Europe 600 Index increased 1.7 percent, the first advance in more than a week.
• The U.K.’s FTSE 100 Index climbed 1.8 percent, the biggest increase in nine months.
• The MSCI Emerging Market Index climbed 0.2 percent, the first advance in a week.

Currencies

• The Bloomberg Dollar Spot Index advanced 0.1 percent to the highest in more than two weeks.
• The euro dipped 0.3 percent to $1.2337, the weakest in more than two weeks.
• The British pound sank 0.1 percent to $1.3909, the weakest in almost three weeks.
• The Japanese yen climbed 0.3 percent to 109.25 per dollar.

Bonds

• The yield on 10-year Treasuries fell one basis points to 2.79 percent.
• Germany’s 10-year yield increased three basis points to 0.73 percent.
• Britain’s 10-year yield climbed two basis points to 1.539 percent.

Commodities

• West Texas Intermediate crude gained 0.6 percent to $63.79 a barrel.
• Gold advanced 0.1 percent to $1,325.11 an ounce.
• Copper declined 1.9 percent to $6,940 a metric ton.

— With assistance by Adam Haigh, and Cecile Vannucci