Stocks rise after data surprise on big options day

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Stocks rallied after US retail sales and consumer confidence gauges rose as traders braced for increased volatility due to the expiration of stock options. The dollar has fallen.The S&P 500 bounced back from a three-day slide and was ready for its third weekly lead – the longest streak since late August. Boeing Co. led gains in the Dow Jones Industrial Average as the European regulator said the 737 Max plane could return to the region’s skies by the end of the year. Pfizer Inc. rallied after saying it could seek emergency use authorization for its COVID-19 vaccine in the United States by the end of November if the vaccine proves effective. Car rental giant Hertz Global Holdings Inc. has jumped $ 1.65 billion in debt to help fund its bankruptcy case.

Retail sales in the United States rose in September at the fastest pace in three months, while consumer confidence rebounded in early October thanks to an improving economic outlook – although confidence was remained much lower than before the pandemic. Meanwhile, manufacturing output unexpectedly declined last month. The numbers highlight the uneven pace of the economic rebound which is threatened by a further acceleration in coronavirus infections and Congress’s inability to agree on a new stimulus package.

“It’s encouraging to see people willing to spend,” said Jeffrey Kleintop, chief global investment strategist for Charles Schwab, adding that the problem is, “if we don’t get a stimulus deal, how long will it take? can it last? ”

President Donald Trump’s economic adviser Larry Kudlow has said it would be difficult for lawmakers to “execute” a relief package ahead of the November 3 election. House Speaker Nancy Pelosi has told fellow Democrats that a rift persists with the White House over a number of components of the fiscal stimulus it is trying to negotiate, even as a deal drew closer on a coronavirus screening program. After a call lasting more than an hour on Thursday, Treasury Secretary Steven Mnuchin said the administration would only make minor changes to a Democratic proposal on this point.

Friday brings the expiration of monthly options on US stocks, indices, and exchange-traded funds and notes, and perhaps a fair amount of turbulence. While the pace of trading is less frenetic than before, analysts have spotted a worrying trend: Much of the stock remains focused on bullish options in some of the world’s biggest tech companies. The industry has led gains in the S&P 500 this year.

Investors have also been watching negotiations between Britain and the European Union, which are set to continue next week even after Boris Johnson said he believed a trade deal was now unlikely.

Here are some of the main movements in the markets:

Stocks
The S&P 500 climbed 0.6% at noon New York time.
The Stoxx Europe 600 index jumped 1.3%.
The MSCI Asia-Pacific index fell 0.2%.

Devises
The Bloomberg Dollar Spot Index was down 0.2 percent.
The euro rose 0.1 percent to US $ 1.1717.
The British pound rose 0.1 percent to US $ 1.2923.
The Japanese yen was little changed at 105.41 per dollar.

Obligations
The yield on 10-year treasury bills rose one basis point to 0.74%.
Britain’s 10-year yield rose less than a basis point to 0.183 percent.
Germany’s 10-year yield fell by one basis point to -0.62 percent.

Basic products
West Texas Intermediate crude fell 0.3 percent to US $ 40.82 a barrel.
Gold fell 0.5% to US $ 1,899.49 an ounce.

– With the help of Adam Haigh, Robert Brand, Todd White, Katherine Greifeld, Vildana Hajric and Sarah Ponczek.



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