US stocks add to records, dollar weakens on Fed

Bloomberg

US stocks added to records as consumer-focussed shares led gains amid data showing a surge in the American services sector. The dollar and Treasuries edged lower amid speculation over a new Federal Reserve chair.
The S&P 500 Index added to records for the seventh day. Carmakers, producers of household products and food retailers led gains after services industries rose at the fastest clip in more than a decade. The greenback remained lower and benchmark Treasury yields edged higher on speculation the Trump administration is close to picking a replacement for Janet Yellen. The US president rattled the market for Puerto Rico’s debt after saying the obligations may need to be wiped clean, while turmoil in Catalonia sent debt on Europe’s
periphery tumbling.
The dollar and Treasuries appeared to earlier take their cue from reports that Donald Trump is said to be close to picking a successor to Janet Yellen. Investors are assessing the policy implications based on a shortlist of possible candidates that include current Governor Jerome Powell and ex-board member Kevin Warsh. The rally in US stocks stalled with data showing companies added fewer workers to payrolls in September than the prior month.
“The market generally is expecting higher interest rates, so I don’t think there will be a major shift if Warsh becomes chair,” Ernie Cecilia, the chief investment officer at Bryn Mawr Trust Co. in Pennsylvania, said by phone. “There would be a tilt, it’d be more hawkish, but not so much that it would be a major obstacle for the stock market, but it would be more so within the stock market from a sector basis.”
Speeches from Russian President Vladimir Putin and UK PM Theresa May also vied for investor attention, while the continued political turmoil tied to Catalonia weighed on the region’s assets.
Earlier, Hong Kong equities added to gains on optimism about monetary loosening in China. Japanese stocks were little changed, and Australia’s declined.
Also this week are data on US trade, durable goods and Friday’s September nonfarm payrolls report. China is due to report monthly foreign-exchange reserves on Thursday. Minutes of the last ECB meeting are the European economic highlight this week.
The S&P 500 Index rose 0.2 percent to 2,539.22 as of 12.1 pm New York time. The Stoxx Europe 600 Index declined 0.2 percent. The UK’s FTSE 100 Index fell less than 0.1 percent. Spain’s IBEX Index fell 2.2 percent. The MSCI Emerging Market Index rose 0.5 percent to the highest in almost two weeks.
The euro climbed 0.2 percent to $1.1762. The British pound increased 0.3 percent to $1.3282. The Japanese yen gained 0.2 percent to 112.68 per dollar.
Germany’s 10-year yield dipped four basis points to 0.43 percent, the lowest in more than a week. Britain’s 10-year yield fell one basis point to 1.346 percent.