Stocks rise on small-cap strength as Turkey eases

Bloomberg

US stocks halted the longest slide since March and the dollar was little changed after hitting a 14-month high as global markets steadied in the wake of Monday’s Turkey-induced turmoil. Crude climbed with gold and Treasuries fell.
The S&P 500 Index advanced for the first time in five days amid thin summer trading. Small-cap shares were particularly strong, with the Russell 2000 Index leading gains among major US gauges. Tapestry Inc., the handbag maker formerly known as Coach, was the leading gainer in the S&P 500, surging 10 percent after its latest sales report showed shoppers are returning to its Kate Spade brand. Meanwhile, Tesla Inc. clawed back from a decline of more than 1.5 percent following the latest tweets from Elon Musk.
The advance in American stocks tracked similar moves in Asia as the rout in Turkish assets eased. The lira rose, and the country’s benchmark equity index climbed even as a diplomatic standoff between Turkey and the US dragged on. European peripheral debt climbed and the euro fell to its lowest against the dollar since July 2017 after data showed the region’s economy grew faster in the second quarter than initially reported.
“Since there doesn’t appear to be signs of contagion at this point — although Spanish, French and Italian banks are owed close to $140 billion by Turkish borrowers — it doesn’t seem like there is much to worry about,” Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, wrote in a note.
In Asia, Japan’s equities outperformed as the yen pared some of Monday’s rise. Shares in Shanghai and Hong Kong dropped after data showed China’s economy hit a mid-year rough patch, though the offshore yuan edged higher.
Elsewhere, oil climbed as focus returned to near-term supply risks. Bitcoin briefly slid below $6,000 and dozens of smaller digital tokens declined as this month’s sell-off in cryptocurrencies showed few signs of letting up.
Earnings are due this week from companies including Maersk, China Unicom, Tencent, Cisco, Walmart, and Carlsberg. Brexit talks between the EU and the UK resume in Brussels on Thursday.
The S&P 500 Index was up 0.6 percent in New York, the first advance in a week. The Stoxx Europe 600 Index fell 0.3 percent and its fifth straight decline. The MSCI All-Country World Index increased 0.4 percent. The MSCI Asia Pacific Index added 0.3 percent. The MSCI Emerging Markets Index retreated 0.2 percent, marking its fifth consecutive down day.
The Bloomberg Dollar Spot Index was little changed. The euro declined 0.5 percent to $1.1358. The British pound dropped 0.2 percent to $1.2742. The Japanese yen sank 0.2 percent to 110.91 per dollar.The yield on 10-year Treasuries rose one basis point to 2.8877 percent.
Germany’s 10-year yield added two basis points to 0.33 percent.