U.S. stocks moved higher in afternoon trading Monday, following last week's slump that pushed the S&P 500 into correction territory, but global risk appetite remains cautious as Israel moves into ground assault on Hamas into a second phase and investors brace for a huge weeks of headline risk on Wall Street.
Last week's bond market-led selloff left the S&P 500 firmly in the red, and down more than 10% from its recent July peak, pegging the benchmark in correction amid a broader sell-off that loped around $12 trillion in global equity market value over the same period.
Investors are likely to track the bond market again this week, given the plethora of central bank decisions expected over the next five days, including the Federal Reserve on Wednesday, as well as a key statement on near-term borrowing forecasts from the Treasury.
Benchmark 10-year note yields, which have risen 30 basis points so far this month and touched a 2007 high of 5.021%, were last seen trading at 4.886% heading in the New York session while 2-year notes held at around 5.046%.
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Global oil prices were in decline overnight, with Brent crude contracts for December delivery falling $3.10to $87.38 per barrel as Israel stepped-up its ground invasion of Hamas-controlled Gaza, but appeared to be advancing with more caution, even amid the rising death toll, while heeding international calls to enter ceasefire talks and acting with the fate of the 208 remaining Israeli hostages held in Gaza in mind.
Stocks may still struggle to find favor over the coming week, however, given the swings expected in the bond market amid another busy session for corporate earnings, with 162 S&P 500 companies expected to report this week, including a crucial fourth quarter update from Apple (AAPL) -) after the close of trading on Thursday.
"The market will have plenty to chew on this week, including a Fed rate decision and the monthly jobs report," said Chris Larkin managing director for trading and investing at E*TRADE from Morgan Stanley. "Traders will be sifting through this week’s numbers for signs things are cooling off, and parsing every word from Jerome Powell to see if the Fed may be shifting away from its hawkish stance."
Heading into the afternoon of the trading day on Wall Street, the S&P 500, which is down 3.98% for the month, was marked 41 points, or 1.02% higher while the Dow Jones Industrial Average gained 472 points.
The tech-focused Nasdaq, which is down 4.36% over the month of October, booked a more modest 117 point, or 0.92% advance.
In overseas markets, a mixed set of results from HSBC, which including a bigger $3 billion buyback and modestly softer third quarter profits, helped the region-wide Stoxx 600 rise 0.36% by the close ofFrankfurt trading, with Britain's FTSE 100 rising 0.50% in London.
Overnight in Asia, a five-day winning streak for stocks in China helped the MSCI ex-Japan index rising 0.12% into the close of trading, while Japan's Nikkei 225 fell 0.95% in a follow-on move to Wall Street's Friday sell-off and the first day of the Bank of Japan's two-day interest rate meeting in Tokyo.
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