GLOBAL MARKETS-World stocks zoom to 5-week highs on economic, stimulus hopes
* Dow up 0.88%, S&P 500 up 1.64%, Nasdaq up 2.56%
By Koh Gui QingOct 12 (Reuters) –
Global stocks scaled five-week highs Monday on hopes that more government stimulus would come and that the world economy was on the mend, while the Chinese yuan retreated from a 17-month high after a policy move over the weekend. Investor optimism that Washington will work through talks that have repeatedly stalled to deliver another round of fiscal stimulus drove major U.S. stock indices to highs last seen in early September. Hopes that the top Wall Street banks will announce a decent set of third-quarter earnings this week that show business was not as weak as feared also helped, while excitement over the expected debut of Apple Inc’s AAPL.O latest iPhone on Tuesdaybuoyed technology stocks. Slugged by stronger investor demand for risk, the U.S.the dollar was pinned near a three-week low, and gold, another safe-haven asset, stayed below a three-week high. The U.S. bond market is closed on Monday for Columbus Day. The cheer over the economic outlook and government stimulus did not boost oil prices, which dropped as investors focused on a boost in supply. The S&P 500.SPX jumped 57 points, or 1.64%, to 3,534.22, within spitting distance of its record high of 3,580.84 struck on Sept. 2. The Dow Jones Industrial Average.DJI climbed 250points, or 0.88%, to 28,837.52.Shares in Apple surged 6.4% while those in Amazon AMZN. Orally 4.8% ahead of its Prime Day shopping event on Oct. 13and 14. That helped the Nasdaq Composite.IXIC to stage its biggest one-day rally in a month, jumping 296 points, or 2.56%, to 11,876.26.” The market leaders are once again the tech names, supported by the fact that the economy continues to expand,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York.MSCI’s gauge of stocks across the globe.MIWD00000PUS climbed 1.43% to 592.96, a level not seen since Sept. 2, while European stocks.STOXX rose 0.72% to 373.00.Bets that more U.S. stimulus was in the offing came despite indications that talks in Washington had stalled again, leading the Trump administration to call on Congress to pass a less ambitious coronavirus relief bill.U.S. President Donald Trump on Friday had offered a $1.8trillion coronavirus relief package after urging his team on twitter to “go big” in negotiations with the Democrats to reach a deal. A sluggish U.S. dollar kept the U.S. dollar index =USDdown 0.07% at 93.045. USD/The Chinese yuan CNY= was off 0.8% after sliding as much as 272 pips overnight in Asia after the central bank cut foreign exchange forward reserve requirements that effectively lowers the cost of shorting the yuan. CNY/The euro EUR= edged 0.1% lower to $1.1812 and the yenJPY= firmed 0.26% to 105.33 per dollar.Gold XAU= edged 0.36% lower to $1,922.70 per ounce. GOL/
Oil prices also slipped after a force majeure at Libya’s largest oilfield lifted, a Norwegian strike affecting production ended and U.S. producers began restoring output after HurricaneDelta.Brent crude LCOc1 fell $1.04, or 2.43%, to $41.81 a barrel and U.S. West Texas Intermediate CLc1 lost $1.04, or 2.56%, to$39.56.JPMorgan JPM.N and Citigroup C.N will kick off the third-quarter earnings season on Tuesday, followed by Goldman Sachs GS.N, Bank of America BAC.N, and Wells Fargo WFC.N on Wednesday and Morgan Stanley MS.N on Thursday. Analyst data from Refinitiv showed Citigroup and Wells Fargo could report that net income has slid 60%, while JPMorgan andBank of America is expected to post drops of 30%. Investment banks Goldman Sachs Group Inc and Morgan Stanley are expected to do better by announcing more modest declines of between 5% and 10%.