By Associated Press
Markets were mixed in Asia on Tuesday, but improved after data that showed China’s exports grew at a faster pace last month.
Japan’s Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +0.40% rose 0.2% while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.29% fell 0.6%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +1.14% improved from session lows though was still down 0.3% while the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 +0.34% gained 0.2%. Benchmark indexes fell in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.15% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.41% , while stocks advanced in Singapore /zigman2/quotes/210597985/delayed SG:STI -0.06% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.15% rose 1.2%. Hong Kong’s Hang Seng index had trading suspended due to a typhoon.
In China, official data showed exports grew at a faster pace in September than the previous month, up 9.9% from the year before. Imports jumped 13.2% from a year ago, up from a 2.1% decrease in August.
Traders were keeping an eye on the Chinese currency after the central bank scrapped a requirement for currency traders to post cash deposits, opening the way for more negative speculation on the country’s yuan, which might help to restrain its rise in value.
The change took effect Monday and eliminates a requirement imposed in 2018 for a 20% deposit on yuan trades to discourage speculators.
The recovery of the world’s second biggest economy has been a rare bright spot as investors wait to see if the U.S. Congress will manage to provide further economic aid for Americans and businesses struggling due to the coronavirus pandemic. With caseloads in the U.S., Europe and many other countries gaining pace, risks of further disruptions to trade, business and other daily activities are rising in some regions.
Wall Street extended its gains Monday from last week’s rally, the market’s best in three months. Investors appeared to largely shrug off the latest signs that Democrats and Republicans are no closer to reaching a deal on more aid for the economy, which remains hobbled by the pandemic.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.24% rose 1.6% to 3,534.22, with Big Tech stocks, including Apple /zigman2/quotes/202934861/composite AAPL +0.48% and Microsoft /zigman2/quotes/207732364/composite MSFT +0.64% , powering much of the gains. Their businesses have proven to be practically impervious to the pandemic, unlike most companies that would benefit from a strengthening economy. The S&P 500 is now within 1.4% of its all-time high set Sept. 2.
Investors may be betting that Congress will deliver a more generous aid bill after the Nov. 3 election, should Democrats regain the majority in Congress, as some polls suggest. That could offset the possible drag on corporate profits from higher taxes and tighter regulations from a Democratic-controlled Washington.
“The market is expressing some comfort with Democrats taking the White House and the Senate, if it means that there will be more stimulus,” said Willie Delwiche, investment strategist at Baird. “But the reality is it’s several months away before anything could get passed.”
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% climbed 0.9% to 28,837.52. The Nasdaq composite /zigman2/quotes/210598365/realtime COMP +0.92% , which is heavily weighted with technology stocks, gained 2.6%, to 11,876.26.
Apple climbed 6.4% and alone accounted for a quarter of the S&P 500’s rise. The iPhone maker also was the index’s biggest gainer. Amazon /zigman2/quotes/210331248/composite AMZN +0.32% rose 4.8%. Both companies have events coming up this week, with Apple expected to unveil its latest batch of iPhones on Tuesday and Amazon holding its Prime Day on Tuesday and Wednesday.
Investors have been agitating for more stimulus since the expiration of extra unemployment benefits for laid-off workers and other support for the economy approved by Congress earlier this year. Even if Washington can’t deliver the aid soon, some investors are hoping for more help in 2021.
Analysts are forecasting the upcoming earnings reporting season will show another quarter of weaker profits. S&P 500 earnings are expected to be down 20.5% from a year earlier, according to FactSet.
But that’s not as bad as the 31.6% drop that S&P 500 companies reported for the spring quarter. Business activity has since regained some momentum as widespread lockdowns eased across the country.
In energy dealings, U.S. benchmark crude gained 2 cents to $39.45 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.17 to $39.43 per barrel on Monday.
Brent crude also added 2 cents, to $41.74 per barrel.
The U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0048% strengthened to 105.37 Japanese yen from 105.34 yen.
MarketWatch contributed to this report.