U.S., European stocks climb on trade optimism

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LONDON/NEW YORK (Feb 15): U.S. equities followed European stocks higher as positive developments in the trade outlook overshadowed lingering concerns about global growth. Treasury yields climbed with the dollar.

The S&P 500 rose as regular trading began Friday, led by energy and financial shares, on reports that the U.S. and China reached consensus in principle on the main topics in their trade negotiations. Talks broke off with a promise to resume next week.

Trade continues to dictate sentiment as the two sides race to reach a deal that would avert a tariff increase on Chinese goods by March 1. Growth concerns have also plagued investors, after China’s factory inflation decelerated on softening demand.

“Any time that there’s news that the trade talks are progressing and comments that there’s progress being made, markets react positively because that’s been one of the three biggest risks hanging over stocks and really was one of the triggers for the pullback we saw in December,” said Kate Warne, an investment strategist at Edward Jones.

The picture in Washington remains cloudy as well, as Congress sent President Donald Trump the legislation he said he will sign to avoid another government shutdown, while a new dispute looms over his decision to declare a national emergency to get more federal money for a border wall. Trump is to address the matter this morning in Washington.

In Europe, miners helped drive gains in the Stoxx 600 Index. Asian shares retreated, with Chinese stocks falling, as weak factory prices highlighted the tough environment for industrial profitability, adding to other disappointing data from major economies. Spanish debt held steady, even as Prime Minister Pedro Sanchez called a snap election, while Italian bonds dropped amid fresh threats that the country could quit the European Union.

Elsewhere, oil climbed on supply cuts and metals advanced. Emerging-market shares fell, while EM currencies edged higher.

Exchanges in the U.S. will be closed Monday for Presidents’ Day.

These are the main moves in markets:

Stocks

The S&P 500 Index increased 0.7% as of 9:37 a.m. New York time. The Dow Jones Industrial Average rose 0.9%. The Stoxx Europe 600 Index gained 1.3% to the highest in more than four months on the biggest rise in more than a week. The U.K.’s FTSE 100 Index rose 0.7%. The MSCI Emerging Market Index fell 0.7%.

Currencies

The Bloomberg Dollar Spot Index rose less than 0.005%. The euro sank 0.1% to US$1.1282. The British pound dipped 0.2% to US$1.2783, the weakest in five weeks. The Japanese yen rose less than 0.05% to 110.43 per dollar. The MSCI Emerging Markets Currency Index climbed 0.2%.

Bonds

The yield on 10-year Treasuries gained three basis points to 2.68%. Germany’s 10-year yield climbed one basis point to 0.11%. Britain’s 10-year yield increased one basis point to 1.164%.

Commodities

The Bloomberg Commodity Index gained 0.8% to the highest in more than a week. LME copper rose 0.2% to US$6,137.00 a metric ton. West Texas Intermediate crude rose 1.6% to US$55.31 a barrel. Gold climbed 0.5% to US$1,318.65 an ounce.