By Todd White
The S&P 500 jumped more than 1% after Lowe’s Cos. and Target Corp. reported sales that topped estimates. The index plunged that much in the final hour Tuesday after a report that cast doubt on the promise of a virus vaccine. Gains were broad, with financials, industrial and energy groups leading. The index is up more than 30% since its March low, but the advance has largely petered out in May as volatility returned.
The Stoxx Europe 600 Index erased an early decline, with Experian Plc among the top advancers after the Irish credit-services firm weathered the pandemic better than analysts expected.
The euro headed for its fourth straight advance versus the dollar, as expectations built for the approval of a region-wide stimulus plan. Gilts climbed as the U.K. sold bonds at a negative yield for the first time.
Yields rose slightly before the U.S. Treasury’s revival of the 20-year bond issue.
Investors have been whipsawed by conflicting news regarding a possible vaccine for the virus, as many governments around the world ease lockdowns even as the pandemic continues to spread, with Brazil now the world’s hotspot for new infections. The euro’s gains coincide with progress on a 500 billion-euro ($550 billion) fiscal-stimulus plan by the European Union, though critics say the package may be too little, too late to counter the devastating effect on the region’s economies and bolster the outlook for corporate profits.
“Sustained central-bank support should prevent a new market correction,” Xavier Chapard, global macro strategist at Credit Agricole SA, wrote in a note. At the same time, “the main driver of asset prices should be the expectations regarding the timing, speed and extent of the economic recovery.”
Elsewhere, equity benchmarks in Japan and India saw the bulk of gains in a mixed Asian session, with Shanghai and Hong Kong in the red. In Japan, Tokyo Stock Exchange was among stocks which surged amid speculation that it may be a contender to join the Nikkei 225 equity index. South Africa’s rand soared as much as 2% against the dollar, with the country’s central bank seen slashing its policy rate to a record low on Thursday to bolster the economy.