U.S. Stocks Slump as Oil Declines; Bonds Advance: Markets Wrap

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(Bloomberg) — U.S. equities were mixed as investors weighed bets on faster growth with rising virus cases and a lockdown in Germany that sparked concerns the global reopening will be delayed.

The S&P 500 Index was little changed amid signs that progress against the pandemic is stalling as worldwide deaths and cases creep higher. The small-cap Russell 2000 fell 1% as beneficiaries of the reopening trade including Carnival Corp. and TripAdvisor Inc. declined after Chancellor Angela Merkel put Germany into hard lockdown over Easter to try to defuse another wave of coronavirus infections. European shares were almost unchanged.

The dollar strengthened, while the 10-year U.S. Treasury yield slid for a second day ahead of this week’s offerings, which include a seven-year note, a maturity that fared poorly in last month’s auction. Oil dropped below $60 a barrel on concerns the market is oversupplied.

While setbacks in the coronavirus fight are putting investors on the back foot, the stabilization in bond yields is providing some relief against fears that heavy U.S. spending could reignite inflation and force tighter central-bank policy. Investors also took stock of equity gains on the one-year anniversary of the S&P 500’s bear-market bottom. The gauge has surged about 75% since then.

“When you consider how far we’ve come it is truly staggering,” said Chris Larkin, managing director of trading and investing product at E*Trade Financial. “The market today has some jitters as it considers what a return to normal means for easy money policies, fiscal support, and interest rates, but for any investor thinking we’re poised for a drop, it’s important to remember that the market is going through historically healthy growing pains and there is still a lot more recovery ahead of us.”

These are some key events to watch this week:

Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell make their first joint appearance before the U.S. House Financial Services committee Tuesday.The U.S. Treasury holds auctions of two-, five- and seven-year debt.EIA crude oil inventory report on Wednesday.U.S. personal income and spending data on Friday.

These are some of the main moves in financial markets:

Stocks

The S&P 500 Index was little changed as of 10:05 a.m. New York time.The Stoxx Europe 600 Index decreased less than 0.1%.The MSCI Asia Pacific Index decreased 0.8%.The MSCI Emerging Market Index fell 0.9%.

Currencies

The Bloomberg Dollar Spot Index gained 0.4%.The euro fell 0.5% to $1.1875.The British pound sank 0.6% to $1.378.The Japanese yen strengthened 0.2% to 108.62 per dollar.

Bonds

The yield on 10-year Treasuries fell four basis points to 1.66%.Germany’s 10-year yield dropped three basis points to -0.34%.Britain’s 10-year yield declined three basis points to 0.78%.

Commodities

West Texas Intermediate crude declined 3.4% to $59.51 a barrel.Gold fell 0.4% to $1,731.80 an ounce.

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