Stocks hit 12-week high despite worries
U.S. stocks reached the highest since mid-March, tracking peers in Europe and Asia as optimism over the world’s largest economy helped investors put protectionist fears to one side. The dollar pared losses, while the euro gained.
The Standard & Poor’s 500 strengthened for a second day as Microsoft Corp. agreed to buy coding site GitHub for $7.5 billion. The Stoxx Europe 600 Index climbed, while the MSCI Asia Pacific Index surged even as China warned it will withdraw from commitments it made on trade if President Donald Trump carries out a separate threat to impose tariffs on the Asian country. The dollar had pulled back after completing a seventh week of gains.
“It’s nice to see that the market is finally ignoring every tweet or announcement on the trade front,” Matt Maley, an equity strategist at Miller Tabak & Co., wrote in an email to clients. “The markets are finally beginning to realize that the announcements and tweets that are coming out of China, Canada, Mexico, Europe and President Trump are just part of the negotiating process in the ‘world of Trump’.”
Investors are in a broad risk-on mood after impressive U.S. jobs data on Friday, which provided an upbeat end to a week that was otherwise dominated by the threat of another euro-area crisis. Much of that concern seems to have dissipated after nationalist parties finally took power in Italy, ending months of deadlock, while the Socialist led-opposition in Spain ousted Prime Minister Mariano Rajoy with a noconfidence vote Friday.