Asian shares track worldwide rally as S&P 500 nears record

Business

People wearing face masks walk by an electronic stock board of a securities firm in Tokyo, Monday, Aug. 3, 2020. Asian shares were mixed on Monday, as investors watched surging numbers of new coronavirus cases in the region, including in Japan. (AP Photo/Koji Sasahara)

Shares advanced across Asia on Tuesday after Wall Street closed broadly higher on encouraging economic reports, starting off August by closing within 3% of the record high it set in February.

Investors appear to be shrugging off surging coronavirus caseloads in dozens of countries.

Tokyo’s Nikkei 225 gained 1.4% to 22,505.83 and the Hang Seng in Hong Kong added 0.7% to 24,637.24. Sydney’s S&P ASX 200 jumped 1.6% to 6,022.50 and the Kospi in Seoul picked up 1.1% to 2,275.84. The Shanghai Composite index edged 0.1% higher to 3,372.76.

Overnight, the S&P 500 added another 0.7% onto its four-month winning streak, closing within 3% of the record high it set in February, at 3,294.61.

Big Tech led the way higher again, and Microsoft and Apple alone accounted for most of the S&P 500′s gain.

The rally followed reports showing that manufacturing has improved across much of the world, including in China, Europe and the United States. With the total caseload rising by less than 50,000 for two straight days, investors bet that U.S. outbreaks might be moderating, said Jeffrey Halley of Oanda.

“Hopes rose that the U.S. might avoid a deeper recession, which was all financial markets needed to send equity markets higher, and for the U.S. dollar to continue recovering some of its recent losses,” Halley said in a commentary.

The Dow Jones Industrial Average rose 0.9% to 26,664.40, while gains for tech stocks, particularly Microsoft and Apple, pushed the Nasdaq composite 1.5% higher, to 10,902.80, another record.

Microsoft jumped 5.6% Monday after it confirmed that it’s in talks to buy the U.S. arm of TikTok, a Chinese-owned video app that is very popular but has also drawn the White House’s scrutiny. Microsoft said its CEO, Satya Nadella, has discussed the issue with President Donald Trump, and the tech giant expects the talks with TikTok to end no later than Sept. 15, either with a deal or without.

Apple added 2.5%, piling more gains onto its 10.5% rise Friday following a blowout report showing that its profits during the spring easily topped Wall Street’s expectations.

In Washington, slow, grinding negotiations on another huge relief effort for the U.S. economy continue, with both the Trump administration negotiating team and top Capitol Hill Democrats reporting progress over the weekend.

The discussions have added urgency now that $600 in weekly benefits from the federal government for laid-off workers have expired, just as the number of layoffs ticks up amid a resurgence of coronavirus counts and business restrictions.

The continued spread of the coronavirus is raising worries that the economy could backslide again and snuff out the budding improvements it’s shown.

Through the pandemic, though, Big Tech has remained almost immune to such concerns on expectations that it can continue to grow.

Apart from the “wall of money” buttressing markets thanks to massive monetary stimulus and government spending, it seems that “investors are already inoculated from the virus while camping under the tech umbrella,” Stephen Innes of AxiCorp. said in a commentary.

Meanwhile, across the market corporate profits have exceeded analysts’ expectations. Roughly two-thirds of the way into earnings season, 84% of S&P 500 companies have reported stronger results than expected, according to FactSet.

In other trading, the yield on the 10-year Treasury rose to 0.56% from 0.55% late Monday.

Benchmark U.S. crude lost 28 cents to $40.73 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.8% to settle at $41.01 per barrel on Monday. Brent crude, the international standard, slipped 31 cents to $43.84. It climbed 1.4% to $44.15 per barrel on Monday.

The U.S. dollar bought 106.12 Japanese yen, up from 105.96 yen late Monday. The euro rose to $1.1767 from $1.1765.

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AP Business Writer Stan Choe contributed.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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