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Blue-Chip Stocks Climb While Dollar Rally Extends: Markets Wrap

(Bloomberg) -- Traders snapped up shares in blue-chip and small-cap stocks after a positive reading on US business activity. The dollar rose, on course for an eighth straight week of gains, the currency’s longest run of the year.Most Read from BloombergTrump Promises Could Have Seismic Impact on Washington EconomyTokyo’s Scorching Summers Focus Public Anger Against Tree CuttingNYC Mayor Adams Names Jessica Tisch to Lead Police Head Amid ProbesParis to Replace Parking Spaces With TreesNew York’s Read More...

(Bloomberg) — Traders snapped up shares in blue-chip and small-cap stocks after a positive reading on US business activity. The dollar rose, on course for an eighth straight week of gains, the currency’s longest run of the year.

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The S&P 500 was little changed, while the blue-chip Dow Jones Industrial Average climbed 0.5% after data showed S&P Global flash November composite output index for service providers and manufacturers advanced to 55.3 — the highest level since April 2022. Economically sensitive shares outperformed, with the Russell 2000 index of smaller firms climbing 1%. US government bonds were mixed and traded in narrow ranges.

Bank of America Corp. strategists warned that the Nasdaq 100 — which has rallied more than 4% this month — was approaching a level versus the S&P 500 that could trigger the unwinding of the trade favoring US equities. The tech-heavy gauge slipped 0.2%.

Investors have piled into US stocks in November, spurred on by expectations that Donald Trump’s economic policies to cut tax rates and support American industry will drive corporate profits higher. During the same period, European equities have been largely flat on the back of a lackluster economy and fears over geopolitical tensions.

“We had a knee-jerk reaction after the election when the US market went up and all others struggled,” said Guy Miller, chief market strategist at Zurich Insurance Co. “Markets like Europe are priced for the advantage US has, so some money will be gravitating to the major laggards.”

The dollar was on track for its longest streak of weekly wins since September 2023. The currency has risen around 2.5% so far this month, adding to October’s gains of nearly 3%.

“The US dollar’s run can continue,” said Peter McLean, head of multi-asset portfolio solutions at Stonehage Fleming. “We also have those geopolitical tensions, which are escalating at the moment. It’s natural for investors to seek refuge in the dollar.”

The rally in Bitcoin lost some steam after the cryptocurrency earlier set a fresh high on bets that Trump’s support for crypto and a looser regulatory environment will help the industry.

The latest developments included Securities and Exchange Commission Chair Gary Gensler’s decision to step down in January. His tenure was marked by a flurry of crypto enforcement actions, which the industry expects will peter out under Trump.

S&P Global’s composite Purchasing Managers’ Index for the euro area dipped back beneath the level that separates growth from contraction in November. The market-implied odds of a 50 basis-point cut by the European Central Bank in December rose to 50%, from about 15% on Thursday. The region’s sovereign bonds rallied while the euro dropped to a two-year low.

Asian equities are on pace for their first back-to-back monthly losses this year amid dollar strength and lingering concerns over the Chinese economy. Still, the region’s more favorable valuations versus the US market are aiding recovery in some assets.

Elsewhere in Asia, Adani Group companies advanced after a $27 billion rout on Thursday following a US indictment against Gautam Adani over allegations of bribery. The company denied the allegations.

Some of the main moves in markets:

Stocks

  • The S&P 500 was little changed as of 10:22 a.m. New York time

  • The Nasdaq 100 fell 0.2%

  • The Dow Jones Industrial Average rose 0.5%

  • The Stoxx Europe 600 rose 1.2%

  • The MSCI World Index rose 0.1%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4%

  • The euro fell 0.6% to $1.0414

  • The British pound fell 0.5% to $1.2531

  • The Japanese yen fell 0.2% to 154.85 per dollar

Cryptocurrencies

  • Bitcoin rose 0.2% to $98,324.51

  • Ether fell 1.5% to $3,297.33

Bonds

  • The yield on 10-year Treasuries was little changed at 4.42%

  • Germany’s 10-year yield declined five basis points to 2.27%

  • Britain’s 10-year yield declined four basis points to 4.41%

Commodities

  • West Texas Intermediate crude rose 0.7% to $70.56 a barrel

  • Spot gold rose 1% to $2,696.79 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Margaryta Kirakosian.

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