Stocks across the globe were little changed on Monday as upbeat industrial data out of China and hopes for more stimulus in the United States were offset by jitters over tensions between Washington and Beijing.
Technology stocks fell after a run of recent gains, while crude oil prices jumped.
Industrial output in China is returning to levels before the coronavirus pandemic halted huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.
Tension between the United States and China ahead of scheduled trade talks at the weekend to review an agreement signed in January was being blamed for the lack of clarity in the market’s direction.
Talks in Washington over a U.S. fiscal stimulus package caused further uncertainty for investors. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday said they were open to resuming negotiations on aid for stricken businesses and workers.
President Donald Trump has sought to take matters into his own hands, signing executive orders and memorandums aimed, among other things, at unemployment benefits, although they were smaller than the package that had been in place for weeks.
Canada’s main stock index rose on Monday, boosted by energy stocks which tracked higher oil prices and an improvement in China’s factory data.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 61.02 points, or 0.37%, at 16,588.10.
The energy sector climbed 2.9% as oil settled higher on Monday, supported by data suggesting Chinese factories were returning to pre-pandemic levels, signs of rising energy demand and hopes for an agreement in the United States on more coronavirus-related economic stimulus.
Brent crude settled up 59 cents, or 1.3%, to $44.99 a barrel. West Texas Intermediate U.S. crude was up 72 cents, or 1.8%, to $41.94 a barrel.
Prices also found support after U.S. President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief.
“The oil complex is heavily reliant on that aid. We need people to be able to boost economic activity to spur demand,” said John Kilduff, partner at Again Capital in New York.
In Toronto, Painted Pony Energy Ltd. jumped 15.3% after Canadian Natural Resources Ltd. said it would buy the company for $461-million, including debt.
Canopy Growth Corp gained about 7.5% after the pot producer reported a smaller-than-expected quarterly loss on Monday.
The materials sector, which includes precious and base metals miners and fertilizer companies, slipped 0.4%.
The S&P 500 ended up slightly and the Nasdaq fell on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a U.S. fiscal support bill.
The Nasdaq, which hit a record high every day of last week, was dragged lower by Microsoft Corp, Amazon.com Inc and Facebook Inc. The Dow sharply outperformed the other two major indexes.
Value stocks, which tend to outperform growth coming out of a recession, have gotten a lift in recent days. The Russell 1000 value index rose, while the Russell 1000 growth index slipped.
Similar rotations in recent years have not lasted very long, said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
“Part of the reason the S&P 500 has been held back is we’re starting to see yet another rotation to value and away from growth,” he said. “That tends to hold back the S&P because it’s so dominated by big tech.”
But, he said, at this point, “I’m looking at this more as a correction of growth than it is people abandoning stocks.”
Bets on a potential coronavirus vaccine, historic fiscal and monetary support, and more recently, a better-than-expected second-quarter earnings season have brought the S&P 500 close to its February record closing high.
Unofficially, the Dow Jones Industrial Average rose 359.4 points, or 1.31%, to 27,792.88, the S&P 500 gained 9.33 points, or 0.28%, to 3,360.61 and the Nasdaq Composite dropped 42.63 points, or 0.39%, to 10,968.36.
Providing some support, U.S. President Donald Trump signed executive orders that partly restored enhanced unemployment benefits after talks between the White House and top Democrats in Congress about fresh stimulus broke down last week.
U.S. Treasury Secretary Steven Mnuchin, in an interview to CNBC on Monday, said the Trump administration and Congress could reach an agreement as soon as this week if Democrats are “reasonable.”
Energy and industrials, among the worst performers this year, gained, while technology and communication services fell.
Among individual movers, Eastman Kodak Co sank after its $765-million loan agreement with the U.S. government to produce pharmaceutical ingredients was put on hold due to “recent allegations of wrongdoing.”
Stocks in Shanghai climbed 0.8%, and South Korea’s Kospi added 1.5%. The Hang Seng in Hong Kong, though, dipped 0.6% after the authorities arrested pro-democracy media tycoon Jimmy Lai and some of his associates on suspicion of collusion with foreign powers.
In Europe, Germany’s DAX returned 0.1%, and France’s CAC 40 gained 0.4%. The FTSE 100 in London added 0.3%.
Reuters
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.