(Bloomberg) – Shares rose to a record high as rotation in economically sensitive industries regained momentum despite a surge in coronavirus cases that could lead to more restrictions and crimp growth.
Both the S&P 500 and Russell 2000 small cap indexes hit all-time highs, while the Dow Jones Industrial Average rose to pre-pandemic levels. All major groups in the stock benchmark continued to perform, with energy, industrial and financial companies among the top winners. The tech-intensive Nasdaq 100 fell short of the big readings, and the winner of the Zays Video Communications Inc., who stayed at home, fell. Walt Disney Co. had solid results and Cisco Systems Inc. rose on optimistic sales projections. Tesla Inc., whose chief executive officer Elon Musk tweeted that he may have Covid-19, has fallen. DoorDash Inc., the largest food delivery platform in the United States, has filed for an IPO.
Risk sentiment resulted in a rotation into value and cyclical sectors, while more defensive sectors underperformed. Equity funds hit a record high after positive results for a coronavirus vaccine, according to data from Bank of America Corp. and from EPFR Global for the week ended November 11, was $ 44.5 billion. While the latest Covid-19 numbers continued to cause concern, and the surge in US infections has now expanded to 49 states, the S&P 500 saw a second weekly rally.
“You have this push-pull,” said Tom Hainlin, national investment strategist at Ascent Private Wealth Group of US bank Wealth Management. “When people get more optimistic, the more cyclical sectors bounce back, and when optimism fades, you go back to tech stocks.”
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New York’s daily Covid-19 cases top 5,000, the highest since April when New York City Mayor Bill de Blasio warned parents to prepare for city schools to shut down classes as early as Monday. The states of California, Oregon and Washington urged arriving people to self-quarantine, while Illinois reported a record number of daily infections and hospital stays the day after announcing a recommendation for a home in Chicago.
James Bullard, president of the Federal Reserve Bank of St. Louis and John Williams, head of New York, both raised concerns about the economic impact of the pandemic, reiterating earlier comments by Fed chairman Jerome Powell. U.S. consumer sentiment unexpectedly fell in early November as the number of Covid-19 infections rose and the elections made Americans rethink their outlook. Meanwhile, a key measure of prices paid to U.S. manufacturers slowed in October, consistent with a pandemic that continues to limit pricing power.
These are some of the key steps in the markets:
The S&P 500 gained 1.4% at 4 p.m. Time in New York. The Stoxx Europe 600 Index has hardly changed. The MSCI Asia Pacific Index rose 0.2%.
The Bloomberg Dollar Spot Index fell 0.4%. The euro rose 0.2% to $ 1.1835. The Japanese yen rose 0.5% to $ 104.59 per dollar.
The 10-year government bond yield rose one basis point to 0.89%. The 10-year yield in Germany fell by one basis point to -0.55%. The UK 10 year yield decreased 1 basis point to 0.338%.
The Bloomberg Commodity Index has hardly changed. West Texas Intermediate Crude Oil fell 2.4% to $ 40.15 a barrel. Gold rose 0.6% to $ 1,888.12 an ounce.
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