(Bloomberg) -- Stocks rose, paring the first weekly decline of the year, as corporate earnings bolstered confidence in the economy and President Donald Trump said U.S. lawmakers agreed to re-open the government on an interim basis. Treasuries yields rose and the dollar weakened against most of its major peers.
The rally in emerging-market assets picked up steam on speculation the arrival of a senior Chinese delegation in Washington next week may help pave the way for a U.S.-China trade deal. Adding to optimism were reports that Federal Reserve Chairman Jerome Powell is weighing ending the central bank’s program of reducing its balance sheet sooner than previously expected, a move that could ease measures of financial conditions.
“My sense is there’s potential for the risk taking channel to kick in,” said Tim Alt, a portfolio manager at Aviva (LON:AV) Investors.
With Friday’s gains, global equities are now poised for their fifth straight weekly increase. Investors had begun earlier in the week to question the scope of the post-Christmas rally as the earnings season rolls on.
Pressure on Trump and lawmakers to end the shutdown escalated Friday as the Federal Aviation Administration temporarily halted flights into New York’s LaGuardia Airport because of a shortage of air-traffic control staff.
“That’s the Achilles heel,” said Bob Phillips, managing principal at Spectrum Management Group in Indianapolis.
Elsewhere, Venezuela’s defaulted 2027 dollar bonds climbed to 30.9 percent of face value as the European Union appeared to be moving toward pushing for an immediate election. West Texas oil futures was higher as traders weighed the Venezuelan crisis and its possible effect on production with the outlook of a market that’s otherwise comfortably supplied.
And the pound headed toward its best week in a year, extending its increase on heightened optimism that a no-deal Brexit will be averted.
And these are the main moves in markets:
Stocks
- The S&P 500 Index rose 0.8 percent as of 2:35 p.m. New York time, while the Nasdaq Composite Index gained 1.1 percent and the Dow Jones Industrial Average increased 0.6 percent.
- The Stoxx Europe 600 Index rose 0.6 percent.
- The U.K.’s FTSE 100 Index dropped 0.1 percent.
- Germany’s DAX Index rose 1.4 percent.
- The MSCI Emerging Market Index rose 1.3 percent, the biggest gain in two weeks.
Currencies
- The Bloomberg Dollar Spot Index dropped 0.7 percent, the biggest decline in about two weeks.
- The euro jumped 1 percent to $1.1412.
- The British pound rose 1 percent to $1.3196.
- The Japanese yen was little changed at 109.61 per dollar.
Bonds
- The yield on 10-year Treasuries climbed three basis points to 2.75 percent.
- Germany’s 10-year yield rose one basis point to 0.19 percent, the first increase in five days.
- Britain’s 10-year yield rose four basis points to 1.31 percent.
Commodities
- West Texas Intermediate rose 0.6 percent to $53.70 a barrel.
- Gold rose 1.4 percent to $1,299 an ounce.