* Dow up 0.88%, S&P 500 up 1.64%, Nasdaq up 2.56%
By Koh Gui Qing
Oct 12 (Reuters) - Global stocks scaled five-week highs
Monday on hopes that more government stimulus would come and
that the world economy was on the mend, while the Chinese yuan
retreated from a 17-month high after a policy move over the
weekend.
Investor optimism that Washington will work through talks
that have repeatedly stalled to deliver another round of fiscal
stimulus drove major U.S. stock indices to highs last seen in
early September.
Hopes that the top Wall Street banks will announce a decent
set of third-quarter earnings this week that show business was
not as weak as feared also helped, while excitement over an
expected debut of Apple Inc's AAPL.O latest iPhone on Tuesday
buoyed technology stocks.
Slugged by stronger investor demand for risk, the U.S.
dollar was pinned near a three-week low and gold, another
safe-haven asset, stayed below a three-week high. The U.S. bond
market is closed on Monday for Columbus Day.
The cheer over the economic outlook and government stimulus
did not boost oil prices, which dropped as investors focused on
a boost in supply.
The S&P 500 .SPX jumped 57 points, or 1.64%, to 3,534.22,
within spitting distance of its record high of 3,580.84 struck
on Sept. 2. The Dow Jones Industrial Average .DJI climbed 250
points, or 0.88%, to 28,837.52.
Shares in Apple surged 6.4% while those in Amazon AMZN.O
rallied 4.8% ahead of its Prime Day shopping event on Oct. 13
and 14. That helped the Nasdaq Composite .IXIC to stage its
biggest one-day rally in a month, jumping 296 points, or 2.56%,
to 11,876.26.
"The market leaders are once again the tech names, supported
by the fact that the economy continues to expand," said Phil
Blancato, chief executive of Ladenburg Thalmann Asset Management
in New York.
MSCI's gauge of stocks across the globe .MIWD00000PUS
climbed 1.43% to 592.96, a level not seen since Sept. 2, while
European stocks .STOXX rose 0.72% to 373.00.
Bets that more U.S. stimulus was in the offing came in spite
of indications that talks in Washington had stalled again,
leading the Trump administration to call on Congress to pass a
less ambitious coronavirus relief bill.
U.S. President Donald Trump on Friday had offered a $1.8
trillion coronavirus relief package after urging his team on
Twitter to "go big" in negotiations with the Democrats to reach
a deal. A sluggish U.S. dollar kept the U.S. dollar index =USD
down 0.07% at 93.045. USD/
The Chinese yuan CNY= was off 0.8% after sliding as much
as 272 pips overnight in Asia, after the central bank cut
foreign exchange forward reserve requirements that effectively
lowers the cost of shorting the yuan. CNY/
The euro EUR= edged 0.1% lower to $1.1812 and the yen
JPY= firmed 0.26% to 105.33 per dollar.
Gold XAU= edged 0.36% lower to $1,922.70 per ounce. GOL/
Oil prices also slipped after a force majeure at Libya's
largest oilfield lifted, a Norwegian strike affecting production
ended and U.S. producers began restoring output after Hurricane
Delta.
Brent crude LCOc1 fell $1.04, or 2.43%, to $41.81 a barrel
and U.S. West Texas Intermediate CLc1 lost $1.04, or 2.56%, to
$39.56.
JPMorgan JPM.N and Citigroup C.N will kick off the
third-quarter earnings season on Tuesday, followed by Goldman
Sachs GS.N , Bank of America BAC.N and Wells Fargo WFC.N on
Wednesday and Morgan Stanley MS.N on Thursday.
Analyst data from Refinitiv showed Citigroup and Wells Fargo
could report that net income has slid 60%, while JPMorgan and
Bank of America are expected to post drops of 30%.
Investment banks Goldman Sachs Group Inc and Morgan Stanley
are expected to do better by announcing more modest declines of
between 5% and 10%.