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Asia Morning: U.S. Stocks Rise As Stimulus Tug-Of-War Continues

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Fundamental analysis of Forex market

On Thursday, U.S. stocks posted further gains. The Dow Jones Industrial Average rose 122 points (+0.43%) to 28425, the S&P 500 climbed 27 points (+0.80%) to 3446, and the Nasdaq 100 was up 47 points (+0.42%) to 11550.

S&P 500 Index (Daily Chart): Rebound Expected

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Obviously market optimism was capped by a tug-of-war between the U.S. government and Congress on negotiations over a new fiscal stimulus package.

Energy (+3.73%), Utilities (+1.8%) and Real Estate (+1.59%) sectors performed the best. Energy stocks — such as Occidental Petroleum (OXY +8.41%), DTE Energy (DTE +6.41%) and Halliburton (HAL +6.92%) — were major gainers in the S&P 500, boosted by a 3% jump in oil prices.

International Business Machines (IBM +5.94%) jumped after announcing plans for a spin-off of its managed infrastructure services unit.

Approximately 70% (66% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average and 79% (65% in the prior session) were trading above their 20-day moving average.

The U.S. Labor Department reported that Initial Jobless Claims declined to 840,000 for the week ended October 3 (820,000 expected), and Continuing Claims dropped to 10.976 million for the week ended September 26 (11.400 million expected).

European stocks were broadly higher. The Stoxx Europe 600 Index increased 0.78%, Germany’s DAX 30 rose 0.88%, France’s CAC 40 gained 0.61% and the U.K.’s FTSE 100 was up 0.53%.

U.S. Treasurys turned stable, as the benchmark 10-year Treasury yield fell to 0.764% from 0.785% Wednesday.

Spot gold rose $6.71 (+0.36%) to $1894/oz.

Oil prices were lifted by reports that over 90% of crude output from the Gulf of Mexico was paused by Hurricane Delta. U.S. WTI crude oil futures (November) jumped $1.33 (+3.33%) to $41.28 a barrel.

On the forex front, the U.S. dollar remained weak relative to its G-10 peers. The ICE Dollar Index edged down to 93.57.

Commodity-related currencies were doing well. AUD/USD was up for a second session gaining 0.37% to 0.7164. USD/CAD sank a further 0.45% to 1.3196.

EUR/USD was little changed at 1.1759, and GBP/USD added 0.14% to 1.2937. Both pairs have been supported by their 20-day moving average.

USD/JPY managed to close above 106.00 for the first time since September 11.