U.S. Stocks Climb While China Rally Powers Ahead
By Joe Wallace
U.S. stocks jumped Wednesday, while mainland Chinese shares
extended a winning streak for a seventh consecutive day.
The S&P 500 rose 0.7% shortly after the opening bell. The
Nasdaq Composite added 1%. The Dow Jones Industrial Average gained
about 180 points, or 0.7%.
U.S. stocks have traded in a narrow range for the past month,
after zipping higher for much of the second quarter. Investors are
weighing stimulus efforts by central banks and governments against
signs that the rebound in U.S. economic growth has lost speed, a
jump in coronavirus cases in parts of the country, and rising
tensions between China and the West.
"I would characterize the stock market as relatively immune to
the [health] crisis," said Gregory Perdon, co-chief investment
officer at Arbuthnot Latham & Co., a U.K. private bank. It is
difficult for stock prices to go down when stimulus measures by the
Federal Reserve and European Central Bank have pinned down bond
yields, he added.
The yield on 10-year Treasury notes rose to 0.668%, from 0.648%
on Tuesday. Bond yields and prices move in opposite directions.
The U.S. reported 60,000 new coronavirus cases Tuesday, a
single-day record, according to data compiled by Johns Hopkins
There are signs investors are turning cautious in other parts of
the market. Gold prices rose to the highest level since September
2011 on Tuesday and have continued to advance.
The main risk markets face is that the U.S. unemployment rate
starts to rise again, after falling to 11.1% in June, according to
"What I'm keenly focused on is how the employment picture, or
the changing employment picture, will play into consumption and how
that feeds into earnings," he said.
Chinese shares resumed their recent spurt, pushing the Shanghai
Composite Index up 1.7%. The index has advanced 8% this week as
individual investors bet that a recovering economy will boost
profits. The streak has revived memories of an earlier rally in
Chinese stocks in 2015, which ended in a crash.
Shares of TechnipFMC rose more than 8% after the oil-and-gas
company said it had signed a construction contract with a refinery
in Egypt, making it one of the biggest gainers in the S&P
International stock markets were mixed. Japan's Nikkei 225 Index
was down 0.8%. The Stoxx Europe 600 fell 0.5%, led lower by shares
Oil prices edged up ahead of data from the Energy Department
showing the size of U.S. crude stockpiles. West Texas Intermediate
futures rose 0.2% to $40.71 a barrel after a separate gauge from
the American Petroleum Institute, an industry group, suggested
inventories grew by 2 million barrels last week.
Gunjan Banerji contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
July 08, 2020 10:21 ET (14:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.