Tech Leads Stock Gains as Reopening Trade Fades: Markets Wrap

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(Bloomberg) — Technology stocks drove an equity-market rebound, beating companies that stand to benefit the most from an economic reopening.

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Investors weighed uncertainties about another wave of the pandemic in Europe and news that the U.S. House passed President Joe Biden’s economic plan. The tech-heavy Nasdaq 100 outperformed other benchmarks, while energy, financial and industrial shares fell. Cruise operators, airlines and other firms that stand to benefit from a return to normalcy tumbled. The expiration of options on Friday could bring extra volatility to the market. Treasuries climbed alongside the U.S. dollar.

While stocks are hovering near records, propped up by robust earnings, a virus resurgence could stall the economic recovery at a time when inflation is raging. Austria will become the first western European country to impose widespread restrictions, while Germany’s top health official said the region’s largest economy may also need to clamp down harder. Foreign Minister Heiko Maas later pushed back, according to a news report.

“It’s been another week of stocks defying gravity in a tense environment,” said Callie Cox, senior investment strategist at Ally Invest. “The road hasn’t been easy, though. Investors are still digesting the risk of runaway inflation, along with a Covid spike and a new wave of restrictions in Europe.”

Read: Fed’s Waller Favors Faster Taper on Job Gains, Inflation Surge

Biden’s signature plan to expand the social safety net, address climate change and rewrite tax policies passed the House Friday morning as Speaker Nancy Pelosi united fractious Democrats to send the legislation to the Senate, where its fate remains uncertain.

Read: Virus May Prove Elephant in The Room That Strategists Missed

Oil headed for a fourth straight week of losses, with renewed prospects of lockdowns just as key consuming nations look to add emergency supply to the market.

Some corporate highlights:

  • Covid-19 booster shots from Moderna Inc. and the partnership of Pfizer Inc. and BioNTech SE were cleared by U.S. regulators for all Americans 18 and older.

  • Boeing Co. is further slowing down the production of 787 Dreamliners, Dow Jones reported, citing people familiar with the matter.

  • Foot Locker Inc. reported sales that missed Wall Street’s expectations as a supply-chain crunch pressures the sneaker retailer ahead of the holiday shopping season.

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 0.2% as of 12:13 p.m. New York time

  • The Nasdaq 100 rose 0.8%

  • The Dow Jones Industrial Average fell 0.5%

  • The MSCI World index was little changed

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%

  • The euro fell 0.5% to $1.1317

  • The British pound fell 0.2% to $1.3469

  • The Japanese yen rose 0.4% to 113.82 per dollar

Bonds

  • The yield on 10-year Treasuries declined five basis points to 1.53%

  • Germany’s 10-year yield declined seven basis points to -0.34%

  • Britain’s 10-year yield declined five basis points to 0.88%

Commodities

  • West Texas Intermediate crude fell 4.3% to $75.58 a barrel

  • Gold futures fell 0.2% to $1,860.50 an ounce

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