U.S. equities finished with solid gains, extending yesterday’s rebound from last week’s tumble, as coronavirus concerns continue to fade in light of the measures deployed by China to contain the spread and economic impact of the virus. As well, yesterday’s plethora of upbeat global manufacturing data added to sentiment. Treasury yields were higher and gold fell, giving back some of a recent flight-to-safety fueled rally, while crude oil prices declined and the U.S. dollar gained ground. In equity news, Google parent Alphabet’s revenues disappointed, but Clorox and Ralph Lauren topped the Street’s expectations, and Tesla extended a recent surge. In light economic news, U.S. factory orders were mixed. Europe and Asia finished higher amid the cooled coronavirus worries.
The Dow Jones Industrial Average rallied 408 points (1.4%) to 28,808, the S&P 500 Index was up 49 points (1.5%) to 3,298 and the Nasdaq Composite jumped 195 points (2.1%) to 9,468. In heavy volume, 974 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ. WTI crude oil was down $0.50 to $49.61 per barrel and wholesale gasoline fell $0.03 to $1.44 per gallon. Elsewhere, the Bloomberg gold spot price fell $21.35 to $1,555.38 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% to 97.95.
Factory orders rose 1.8% month-over-month (m/m) in December, above the Bloomberg expectation of a 1.2% gain, and compared to November’s downwardly-revised 1.2% drop. Stripping out the volatile transportation component, orders grew 0.6%, north of the expected 0.1% rise and versus November’s negatively-adjusted 0.2% increase. Final durable goods orders preliminarily reported last week, were unrevised at a 2.4% m/m gain for December, and orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, were revised favorably to a 0.8% decline.
Treasuries were lower, as the yield on the 2-year note rose 6 basis points (bps) to 1.41%, while the yield on the 10-year note gained 7 bps to 1.59%, and the 30-year bond rate advanced 8 bps to 2.07%.
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