U.S. Stocks, Bond Yields Rise to Start the Week
August 19 2019 - 11:35AM
Dow Jones News
By Caitlin Ostroff and Akane Otani
U.S. stocks bounced higher Monday, buoyed by a rally among
shares of banks and technology companies.
The Dow Jones Industrial Average rose 306 points, or 1.2%, to
26192 shortly after the opening bell. The S&P 500 added 1.2%,
and the Nasdaq Composite advanced 1.5%.
Shares of companies that have reeled on escalating trade
tensions jumped Monday after U.S. officials said over the weekend
that the White House was laying the groundwork for a new round of
trade talks with Beijing. President Trump added on Twitter that the
U.S. was "doing very well with China, and talking."
Bank stocks, which have slid the past couple of months alongside
global bond yields, bounced higher. Bank of America rose 2.1%, and
Morgan Stanley climbed 2.2%.
Technology stocks also helped lift the broader market, with
Advanced Micro Devices and Nvidia rising more than 3% apiece.
Semiconductor firms have swung the past few months as investors
have weighed the risk of increasing trade restrictions cutting into
firms' profits.
As stocks rose, bond yields retreated from their recent lows.
The yield on the benchmark 10-year U.S. Treasury note rose Monday
to 1.611%, according to Tradeweb, from 1.540% Friday. Yields, which
rise as prices fall, have been pressured in recent months by
increasing fears about the health of the economy.
Later this week, investors will parse minutes from the Federal
Reserve's latest meeting, as well as hear from central bank leaders
meeting in Jackson Hole, Wyo.
Bond investors this week will also be focused on speculation
around a major stimulus package from the European Central Bank and
German fiscal stimulus, said Commerzbank strategist Rainer
Guntermann. Germany plans to sell a new 30-year bund on
Wednesday.
The Stoxx Europe 600 added 1.1%, led by gains in its basic
resources, autos and banking sectors. Germany's DAX rose 1.5% and
the U.K.'s FTSE 100 was up 1.1%.
European bank shares have gained on easing recession fears,
having been "priced to a disaster scenario," said Patrick Spencer,
vice chairman of equities at Baird. "They're in the bargain bin,"
he added.
In Asia, Hong Kong stocks were among the best performers in the
region. The Hang Seng Index rose 2.2%, its best performance since
June, as there was some relief that the weekend's large-scale
protest didn't end in violence.
Elsewhere in Asia, the Shanghai Composite rose 2.2%, while
indexes in Japan and Korea rose less than 1% apiece.
Chinese shares stood out with a strong rally, buoyed by a fresh
interest-rate reform by Beijing that is widely expected to result
in easier monetary policy.
An official blueprint to develop the southern city of Shenzhen
into a global technology hub and experiment with more financial
liberalizations there made the gains on the smaller exchange even
sharper, analysts said.
Leading the pack were Shenzhen-listed technology firms and
brokerages that stand to benefit from a proposed reform of
share-listing policy. ZTE's stock rose 6.1%, while Citic Securities
increased 6.6%.
"Brokers are rising sharply because the Shenzhen development
plan indicates stronger determination by the government to further
open up the financial sector and encourage innovation," said Deng
Wenyuan, a Suzhou-based analyst at Soochow Securities.
Shen Hong and Steven Russolillo contributed to this article.
Write to Akane Otani at akane.otani@wsj.com
(END) Dow Jones Newswires
August 19, 2019 11:20 ET (15:20 GMT)
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