S&P 500 Opens Higher, Extending August Rally
By Anna Isaac
U.S. stocks rose Wednesday, putting the S&P 500 back on
track to continue this month's rally a day after the benchmark
posted its biggest decline in almost three weeks.
The S&P 500 rose 0.8%, erasing losses from Tuesday. The Dow
Jones Industrial Average added 285 points, or 1%, while the Nasdaq
Composite Index, which has lagged behind the other benchmarks this
month, also advanced 1%.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.6%.
Most major Asian equity benchmarks rose by the close of trading,
except for China's Shanghai Composite Index.
Shares of drugmaker Moderna were up 7.7% after it said Tuesday
it agreed to provide the U.S. government 100 million doses of its
experimental coronavirus vaccine in exchange for more than $1.5
billion. Tesla's shares were up 6% after the electric-car maker on
Tuesday said it would enact a 5-for-1 stock split.
In bond markets, the yield on the benchmark 10-year Treasury
note gained for a fourth day, ticking up to 0.686%, from 0.657%
Tuesday. The yield on Tuesday had reached its highest level since
Fresh inflation data showed that U.S. consumer prices increased
by 0.6% in July, more than the average expectation of 0.3%,
according to FactSet.
Gold prices wavered Wednesday, after the commodity on Tuesday
fell by the most since March. Analysts said appetite for gold has
been eroded this week by the rise in U.S. government bond yields.
The precious metal -- usually viewed as a haven asset that
investors flock to when stocks are in tumult -- has climbed this
year even as equities advanced.
"There's been a breakdown in the relationship between equities
and gold, " said Geoff Yu, senior markets strategist at BNY Mellon.
"This happens if you believe there's going to be moderate
inflation, driven by an increase in productivity from
Brent crude, the international oil benchmark, rose 1.2% to
$45.05 a barrel.
Investors are also keeping a close eye on lawmakers'
negotiations over a new coronavirus-relief package for American
households and businesses. Senate Majority Leader Mitch McConnell
said that talks were "at a bit of a stalemate," dimming appetite
for stocks and other risky assets on Tuesday.
"Mitch McConnell's comments yesterday implied that we might not
be able to see an agreement before Congress goes into recess," said
Edward Park, deputy chief investment officer at Brooks Macdonald.
"Markets, particularly in the last day or so, seem to be pricing in
a stimulus even as lawmakers play down the odds."
In the U.K., fresh data showed that the country recorded a
steeper second-quarter contraction than any other rich nation,
signaling that it has suffered the worst economic hit from
coronavirus in Europe. The British economy shrank 20.4% in the
second quarter, the country's statistics agency said Wednesday. The
British pound slipped 0.3% against the dollar and fell 0.5% against
In Asia, the Shanghai Composite Index fell 0.6% by the close of
trading, while Japan's Nikkei 225 rose 0.4%. Hong Kong's Hang Seng
Index rose 1.4%.
Write to Anna Isaac at email@example.com
(END) Dow Jones Newswires
August 12, 2020 09:48 ET (13:48 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.