Nasdaq rockets to record as U.S. mulls stimulus
Stocks advanced as positive economic data countered pessimism over a resurgence of COVID -19 cases and after the White House was said to consider acting on its own to boost unemployment benefits.
The Nasdaq Composite touched a record as Apple Inc. reached an all-time high and with Microsoft Corp. gaining as it tried to salvage a deal for the U.S. operations of Tiktok. The Nasdaq Composite was up 157.52 points or 1.5 per cent to a record high close of 10,902.80.
Marathon Petroleum Corp. jumped on plans to sell its gas-station business for US$21 billion.
Europe’s benchmark gauge headed for its biggest advance in two weeks as auto and tech shares surged after the euro area’s first manufacturing expansion in oneand-a-half years.
The dollar bounced higher after its worst July in a decade and Treasuries fell across the yield curve as data showed U.S. manufacturing expanded in July at the fastest pace since March 2019. Stocks got a lift as the White House was said to be exploring whether U.S. President Donald Trump can act on his own to extend enhanced unemployment benefits. Investors are entering August looking past the disturbing rate of coronavirus infections and scattered moves to return major cities to lockdowns.
“Momentum begets more momentum, and the markets have been overbought we believe, but the demand to buy has been there,” said Bob Phillips, managing principal at Spectrum Management Group. “There’s a big desire from both parties to get some kind of stimulus passed. The way the market is reacting, I think the market is expecting that.”
Meanwhile, tension between the U.S. and China emerged as another threat to risk appetite. The Trump administration will announce measures shortly against “a broad array” of Chinese-owned software deemed to pose national-security risks, U.S. Secretary of State Michael Pompeo said. Elsewhere, equities rose in Japan and China, where mainland-listed technology stocks surged on expectations of support from Beijing in response to U.S. moves against Chinese-owned software companies. West Texas-grade oil traded around US$41 a barrel as OPEC+ producers started supplying more crude to the global market.
Gold prices retreated from a record high after some profit-taking and the dollar’s strengthening, though concerns about the coronavirus’s toll on the economy limited bullion’s losses. MSCI’S benchmark for global equity markets rose 0.73 per cent to 555.9. Europe’s broad Ftseurofirst 300 index added 2.18 per cent to 1,415.15, lifted by a reading of IHS Markit’s final Manufacturing Purchasing Managers’ Index for the euro zone. The index bounced to 51.8 in July, its first time above the 50 mark separating growth from contraction since January 2019. Manufacturing activity in China expanded at the fastest pace in nearly a decade as domestic demand improved, China’s Caixin/ Markit PMI showed.