Asian shares extend rally; S&P 500 within 1% of record

Shares have advanced in Asia, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February

Asian shares extend rally; S&P 500 within 1% of record By ELAINE KURTENBACHAP Business WriterThe Associated Press

Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.

Japan’s Nikkei 225 added 1.6% and Hong Kong gained more than 2% in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.

The gains followed President Donald Trump’s announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.

Sentiment got an extra boost from signals that the talks might resume, and by Trump’s suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for “middle income” earners.

The Hang Seng in Hong Kong added 2.1% to 24,877.14, while the Nikkei 225 climbed to 22,686.53. In South Korea, the Kospi picked up 1.3% to 2,418.91. Sydney’s S&P/ASX 200 jumped 0.9% to 6,167.10 and the Shanghai Composite index climbed 0.7% to 3,402.44.

Overnight, the S&P 500 rose 0.3%, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within 1% of its last record high.

The Dow Jones Industrial Average rose 1.3% to 27,791.44. The Nasdaq composite lost 0.4%, to 10,968.36.

Trump signed executive orders over the weekend to extend an expired benefit for unemployed workers, among other things. The orders were more limited than what investors hoped to see from a full rescue bill for the economy, but hopes remain that the White House and Congress will eventually reach a compromise.

Losses for technology stocks weighed on the market amid worries that worsening U.S.-China relations could mean retaliations against the U.S. tech industry.

The industry has mostly cruised through the pandemic, thanks to the need for tools for remote work and demand for online commerce and entertainment to weather business shutdowns and quarantine advisories. Critics had already been calling tech stocks overpriced, even after accounting for their huge and resilient profits.

Investors are looking to Washington for a fresh lifeline for the U.S. economy, which pancaked into recession as the pandemic gained ground in the spring.

On top of the rising number of coronavirus counts around the world, uncertainty has grown with widening antagonisms between the United States and China, the world’s largest economies. The latest move in their escalating tensions was China’s announcement of unspecified sanctions against 11 U.S. politicians and heads of organizations promoting democratic causes, including Senators Marco Rubio and Ted Cruz.

The two sides are scheduled to hold virtual trade talks at the end of the week.

Overall, the flood of government spending and monetary stimulus, with central banks buying assets to keep credit cheap, have kept markets rising since March.

“With the Fed buying credit and indirectly saving U.S. stocks, traders should not expect any major corrections even if the selling of tech stocks persists deeper into the trading week,” Edward Moya of Oanda said in a commentary.

The yield on the 10-year Treasury was steady at 0.58%.

Benchmark U.S. crude oil for September delivery gained 23 cents to $42.17 per barrel in electronic trading on the New York Mercantile Exchange. It rose 72 cents on Monday to settle at $41.94 a barrel. Brent crude oil for October delivery picked up 14 cents to $45.13 per barrel. It rose 59 cents to $44.99 a barrel overnight.

The price of gold fell $9.00 to $2,030.70 per ounce.

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AP Business writers Alex Veiga, Stan Choe and Damian J. Troise contributed.