Stocks rally as earnings roll in; greenback falls

Bloomberg

US stocks jumped as earnings from major banks and health-care firms bolstered confidence in the economy. The dollar fell as geopolitical tensions appeared to ease.
The S&P 500 rallied after the index couldn’t make a clean break of the key 200-day moving average. A rebounding tech sector led gains. Strong third-quarter results from Goldman Sachs Group Inc. and Morgan Stanley helped boost the benchmark, while Johnson & Johnson and UnitedHealth Group Inc. earnings bolstered the Dow Jones Industrial Average. European stocks rose the most in four months, led by shares in Italy after the government agreed on a budget.
The dollar held near a two-week low, while the 10-year Treasury yield traded around 3.16 percent amid data showing US factory production expanded in September. Oil retreated.
While the bid for haven assets appears to have ebbed, caution is still on display as investors look for any signal from corporates hinting at a slowdown or stronger growth that could affect the pace of Federal Reserve rate hikes. Netflix Inc. becomes the first large technology company to report after today’s close, while minutes from the latest Fed meeting should offer more clues a day later. In the background, traders are still grappling with continuing US-China trade war rhetoric and geopolitical strains.
Elsewhere, the pound climbed as leaders struck a conciliatory tone a day after Brexit negotiations broke down. In Asia, Japan’s equities outperformed, while Chinese shares retreated.
APEC finance ministers are set to meet in Port Moresby, Papua New Guinea. China’s new yuan loans may have risen to 1.36 trillion yuan ($196 billion) in September from August’s 1.28 trillion yuan as officials sought to buoy economic growth. Third-quarter GDP for China comes on Friday, with headline growth forecast to slow to 6.6 percent year on year from 6.7 percent, in addition to last month’s retail sales and factory output.
Minutes from the Federal Reserve’s latest policy meeting are due on Wednesday, with investors focussed on projections for further interest rate rises. Netflix is among companies
reporting this week.
Euro-area governments, including Italy, must turn in fiscal budget proposals to the European Commission.
The S&P 500 Index rose 1 percent in New York. The Stoxx Europe 600 Index gained 1.2 percent. The UK’s FTSE 100 Index fell 0.1 percent. Germany’s DAX Index climbed 0.8 percent, the biggest increase in more than three weeks.
The MSCI Emerging Market Index gained 0.9 percent. The MSCI Asia Pacific Index climbed 0.6 percent.
The Bloomberg Dollar Spot Index dipped 0.2 percent to the lowest in almost three weeks. The euro rose 0.2 percent to $1.1597. The British pound rose 0.5 percent to $1.3216. The Japanese yen dipped 0.3 percent to 112.07 per dollar.
The yield on 10-year Treasuries rose less than one basis point to 3.16 percent. Germany’s 10-year yield dipped one basis points to 0.49 percent, the lowest in almost two weeks. Britain’s 10-year yield advanced less than one basis point to 1.613 percent.
Italy’s 10-year yield declined six basis points to 3.487 percent, the lowest in a week on the biggest fall in a week.
West Texas Intermediate crude decreased 0.3 percent to $71.53 a barrel. Gold rose 0.3 percent to $1,233.90 an ounce, the highest in almost 12 weeks.