US stocks erase losses after solid housing report

Equities turned higher as US existing-home sales topped estimates. Bloomberg

A surprisingly strong reading on the US housing market added fuel to stocks just a day after Federal Reserve Chair Jerome Powell downplayed mounting economic concerns amid President Donald Trump’s trade war.

Equities turned higher as US existing-home sales topped estimates. The rebound in stocks will face a new test Friday with the so-called triple-witching that will see about $4.5 trillion of contracts tied to stocks, indexes and exchange-traded funds mature, according to Citigroup Inc. Meantime, the advance in bonds pushed yields on two-year notes further below the 4% mark.

To Matt Maley at Miller Tabak, investors’ fears were somehow soothed by Powell’s comments as they seemed to come away with the feeling that the Fed will step to the plate and do whatever is needed to prevent a recession.

“The question now is whether the bounce (in stocks) that began late last week is something will signal the bottom for this decline or it’s something that is merely working off the short-term oversold condition that had developed by mid-week last week,” Maley said.

The S&P 500 rose 0.2%. The Nasdaq 100 added 0.3%. The Dow Jones Industrial Average gained 0.2%. Nvidia Corp. aims to spend billions of dollars to procure US-made chips and electronics over the next four years, the Financial Times reported. Kraken is acquiring retail futures trading platform NinjaTrader for $1.5 billion.

The yield on 10-year Treasuries declined four basis points to 4.20%. The dollar rose 0.4%. The pound held losses as the Bank of England voted to stay put on rates amid a turbulent global backdrop.