U.S. Stocks Climb; Dollar Rallies on Stimulus Bets: Markets Wrap

(Bloomberg) -- U.S. stocks rose as investors digested a battery of economic and financial measures from global policy makers aimed at easing the market turmoil. Treasuries climbed and the dollar extended its rally.

In early trading Thursday, stocks largely avoided the wild swings that characterized previous days, with the S&P 500 up less than 1% while the Nasdaq led gains as bargain hunters sorted through technology stocks. Tesla Inc., (NASDAQ:TSLA) Netflix Inc. (NASDAQ:NFLX) and Facebook Inc . (NASDAQ:FB) all rose at least 7%. Still, data showed U.S. jobless claims came in higher than expected as traders weighed the growing likelihood of a global recession and corporate defaults triggered by unprecedented lockdowns and supply-chain disruption.

“There’s a lot of panic, but there are buyers on Wall Street looking for opportunities,” said Jim Paulsen, chief investment strategist for the Leuthold Group. “The issue is we don’t know where this is going to be in two months.”

Stocks edged higher in Europe after falling across most of Asia. In the euro zone, sovereign bonds soared from France and Italy to Greece after the region’s central bank boosted its efforts to stabilize the economy and capital markets. The yen, so often a haven amid market stress, slumped in a sign of the extraordinary demand for the greenback, which strengthened for an eighth day versus a basket of its major peers to its highest in at least 15 years. WTI oil rebounded from a plunge that had taken it to almost $20 a barrel on Wednesday.

Investors are trying to guess at whether the unprecedented policy actions taken to fight the effects of the coronavirus pandemic would be enough, even as Donald Trump dubbed himself a “wartime president” ready to do whatever it takes. The rush into cash and havens has battered risk assets almost everywhere, particularly equities, high-yield bonds and non-dollar currencies.

The latest developments include the European Central Bank launching a 750 billion euro ($815 billion) debt-buying program to keep borrowing costs in check, and the Federal Reserve’s debut of a program to support money-market mutual funds. South Africa cut interest rates and Germany may authorize emergency debt issuance. But looming over everything is question of how long the economic downturn will last.

“It’s a good start and a step in the right direction with the tools that they have available, but they can still do more,” Sue Trinh, global macro strategist at Manulife Asset Management in Hong Kong, told Bloomberg TV. “There’s much more need for U.S. dollar liquidity to get to where it’s needed the most,” she said. “At the moment the markets are screaming it’s not enough -- we need to see more of that.”

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Meanwhile, the U.S. Senate cleared the second major bill responding to the coronavirus pandemic and White House economic adviser Larry Kudlow said the government might take equity positions as part of corporate rescues.

Here are the main moves in markets:

Stocks

• The S&P 500 Index rose 1% as of 10:16 a.m. New York time; the Nasdaq Composite rose 33%.
• The Stoxx Europe 600 Index rose 0.3%.
• The MSCI Asia Pacific Index declined 2.6%.
• The MSCI Emerging Market Index fell 2.7%.

• The Bloomberg Dollar Spot Index gained 0.7%.
• The euro sank 1.1% to $1.0798.
• The British pund rose 0.1% to $1.1619.
• The Japanese yen weakened 1.6% to 109.81 per dollar.

Bonds

• The yield on 10-year Treasuries declined six basis points to 1.13%.
• Germany’s 10-year yield rose five basis points to -0.19%.
• Britain’s 10-year yield jumped 14 basis points to 0.93%.
• Japan’s 10-year yield climbed less than one basis point to 0.083%.

Commodities

• West Texas Intermediate crude rose 6.7% to $21.74 a barrel.
• Gold weakened 0.9% to $1,472.08 an ounce.

©2020 Bloomberg L.P.