October 20, 2020

Stocks & Bonds: World Leaders’ Optimism On Economy Lifts Shares

Freeport-McMoRan Copper and Gold advanced 2.7 percent as copper rallied after Standard Chartered Bank predicted price gains. Wells Fargo and Bank of America increased at least 1.5 percent, pacing a rally in financial shares, as Nout Wellink, a member of the governing council of the European Central Bank, said he expected Greece to receive aid from the International Monetary Fund next month. The Marvell Technology Group surged 11 percent after projecting higher sales than analysts had estimated.

The Standard Poor’s 500-stock index rose 5.41 points, or 0.4 percent, to 1,331.10. The Dow Jones industrial average added 38.82 points, or 0.3 percent, to 12,441.58. The Nasdaq composite index rose 13.94 points, or 0.5 percent, to 2,796.86.

The Dow Jones and S. P. indexes fell for a fourth consecutive week, while the Nasdaq fell for a third consecutive week.

Volume on United States exchanges was 19 percent lower than a week earlier at 5.47 billion shares before the Memorial Day holiday.

“The resilience of riskier assets is linked to the fact that we’re still going to have easy monetary policy,” said Bruce A. Bittles, chief investment strategist at Robert W. Baird Company of Milwaukee. “The Federal Reserve’s program of quantitative easing has helped bolster stock prices but has not helped the housing market.”

The S. P. 500 has fallen 2.4 percent from an almost three-year high on April 29 on concern about Europe’s debt crisis and weaker-than-forecast economic data. Still, the gauge has risen 5.8 percent from the end of 2010 amid government stimulus measures and higher-than-forecast corporate profits.

Global stocks rose after the Group of 8 leaders said that a strengthening global economy would pave the way to cuts in the debt built up during the recession after the 2008 financial crisis.

Europe vowed to fight its fiscal woes with “determination,” while President Obama promised a “clear and credible” United States deficit-reduction strategy. Japan was allowed to put off savings measures until its economy rebounded from the March earthquake and tsunami.

The Thomson Reuters/University of Michigan final index of consumer sentiment increased to a three-month high of 74.3 from 69.8 in April. Economists had forecast a reading of 72.4, the same as the preliminary figure issued earlier this month, according to the median estimate in a Bloomberg News survey.

Copper rose in New York as increased premiums signaled stronger demand in China and Standard Chartered predicted price gains. Freeport advanced $1.34, to $51.73.

Banks had the biggest gain in the S. P. 500 out of 24 industries, rallying 1.5 percent. Wells Fargo, the home lender, advanced 1.6 percent to $28.14. Bank of America rose the most in the Dow, rallying 2 percent to $11.69.

Marvell Technology surged 11 percent, to $16.17. The company forecast second-quarter profit of 35 to 39 cents a share, excluding some items. Analysts projected 33 cents, according to the average of estimates compiled by Bloomberg.

A report showed that the number of Americans signing contracts to buy previously owned homes plunged more than forecast in April.

Interest rates were steady. The Treasury’s benchmark 10-year note fell 4/32, to 100 14/32, and the yield rose to 3.07 percent, from 3.06 percent late Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=634bbb0ab16d754e00e42dad817f8270

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