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Traders work on the floor of the New York Stock Exchange on March 17 in New York City.

US stocks rally; treasuries gain, oil declines

Traders work on the floor of the New York Stock Exchange on March 17 in New York City.

US stocks rallied as investors saw glimmers of optimism in health-care efforts to deliver rapid virus testing. The dollar rose.

US President Donald Trump

The S&P 500 Index climbed for the fourth time in five days even after a weekend full of negative pandemic news, including President Donald Trump’s abrupt order to extend recommendations aimed at inhibiting the spread. The Nasdaq 100 advanced three per cent as Health-care shares were among the biggest gainers. Abbott Laboratories surged after unveiling a five-minute coronavirus test and Johnson & Johnson announced a vaccine candidate for the virus.

Crude fell more than six per cent after briefly paring losses when Trump said he plans to speak with Russia’s Vladimir Putin about crude. The 10-year Treasury yield fell to 0.62 per cent, while the dollar was on course to snap a four-session losing streak. Gold dipped. Pessimism returned to credit markets.

Investors are beginning the week hearing that the biggest economy will stay crippled for longer after Trump heeded advice from the government’s top doctors that re-opening the US in two weeks risks greater loss of life as the coronavirus accelerates. The president said in a news conference “social distancing” guidelines would remain until at least April 30. But traders also continue to look for bright spots, such as in health-care companies that could produce products that help curb the outbreak.

“I do think that we’re going to continue to see volatility. Whatever has happened with equity markets, the VIX has stayed at very elevated levels,” Fabiana Fedeli, global head of fundamental equities at Robeco, said by phone in reference to the Cboe Volatility Index, a measure of expected swings in the S&P 500. “We’re going to have a lot of news flow and some of it will be negative — it could be concerns over the outbreak, it could be concerning the balance sheets of companies. And there will also be positive news as well.”

A person looks at stock prices displayed in the trading gallery of the RHB Investment Bank Bhd. headquarters in Kuala Lumpur, Malaysia, on Tuesday, Feb. 17, 2020.

In the latest stimulus moves, China’s central bank lowered short-term funding rates and injected cash into its financial system, Australia announced a job-support program and limited public gatherings to just two people, while Singapore unveiled an unprecedented easing in policy.

Elsewhere, Australian stocks surged by a record thanks to the new stimulus measures. Emerging currencies including South Africa’s rand and Mexico’s peso tumbled amid concern about debt downgrades.

These are the main moves in markets:

Stocks

  • The S&P 500 Index climbed 2.4% as of 12 p.m. in New York.
  • The Dow Jones Industrial Average rose 2.3%.
  • The Stoxx Europe 600 Index advanced 1.3%.
  • The MSCI Asia Pacific Index dipped 0.9%.

Currencies

  • The Bloomberg Dollar Spot Index jumped 1%.
  • The euro declined 1% to $1.103.
  • The British pound decreased 0.5% to $1.2396.
  • The Japanese yen rose 0.1% to 107.82 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased three basis points to 0.65%.
  • Germany’s 10-year yield dipped two basis points to -0.49%.

Commodities

  • Gold fell 0.7% to $1,641 an ounce.
  • West Texas Intermediate crude decreased 5.4% to $20.36 a barrel.