Stocks rise, pushing the S&P 500 closer to its record high

Stocks are opening higher on Wall Street, pushing the S&P 500 closer to the record high it reached back in February

NEW YORK -- Stocks are opening higher on Wall Street, pushing the S&P 500 closer to the record high it reached back in February. The benchmark index was up 0.2% in the early going on Monday. Traders were closely watching the latest turns in Washington over more steps for economic relief. President Donald Trump bypassed lawmakers over the weekend as he claimed the authority to defer payroll taxes and replace an expired unemployment benefit with a lower amount after talks in Congress collapsed, but Democrats called it a pre-election ploy. The price of crude oil rose again, while small-company stocks also rose.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Global shares advanced Monday after U.S. President Donald Trump issued executive orders to provide tax relief and stopgap unemployment benefits for Americans hit by the fallout from the coronavirus pandemic.

Market gains were capped, however, after China announced unspecified sanctions against 11 U.S. politicians and heads of organizations promoting democratic causes, including Senators Marco Rubio and Ted Cruz, who have already been singled out by Beijing.

Investors are watching for further developments on stimulus for the U.S. economy and on trade tensions between Beijing and Washington. Trade talks between the countries are planned for Friday, to be held virtually due to the coronavirus pandemic.

The future contract for the Dow industrials gained 0.3% while that for the S&P 500 was flat. In Europe, Germany's DAX was up 0.1% at 12,691 while the CAC 40 in France added 0.4% to 4,909. Britain's FTSE 100 picked up 0.3% to 6,052.

“It has been an unusually risk-friendly start to the Monday proceedings, but there is still a lot of wood to be chopped on the U.S. stimulus deal, while Aug. 15 trade talks loom ominously," Stephen Innes of AxiCorp said in a commentary.

Stock prices fell in Hong Kong after the authorities arrested pro-democracy media tycoon Jimmy Lai and some of his associates on suspicion of collusion with foreign powers.

The Hang Seng index dropped 0.6% to 24,377.43.

Lai was arrested Monday under the city’s national security law and posts on Twitter showed him being taken away by police, as dozens of uniformed police searched the headquarters of his newspaper, Apple Daily.

The national security law that came into effect June 30 is widely seen as a means to curb dissent after anti-government protests rocked Hong Kong last year. It has raised questions over whether and to what extent Communist Party leaders in Beijing will respect the “one-party, two-systems" arrangement promised to the former British colony for a half-century after China took control of the semi-autonomous in 1997.

Meanwhile, China imposed sanctions on 11 Americans, exactly equaling the number of Hong Kong and Chinese officials placed on a sanctions list by the U.S. last week over the crackdown.

Elsewhere in Asia, South Korea's Kospi jumped 1.5% to 2,386.38 and the S&P/ASX 200 in Australia surged 1.8% to 6,110.20. The Shanghai Composite index advanced 0.8% to 3,379.25.

China reported its consumer price index rose to 2.7% in July from 2.5% in June as flooding disrupted farming across much of the country, pushing food prices higher. But producer prices and core inflation, which exclude food and energy prices, fell to a ten-year low of 0.5%, reflecting continued weakness amid the pandemic.

Sentiment on Wall Street was lifted Friday by positive U.S. jobs data, with U.S. employers adding nearly 1.8 million jobs last month, about 185,000 more than economists had forecast.

The S&P 500 inched up 0.1% to 3,351.28 to eke out a sixth straight gain on Friday. It is within 1% of its record high set in February.

But uncertainty overhangs the markets, with the total number of confirmed coronavirus cases in the U.S. surpassing 5 million.

With Republicans and Democrats in Congress reportedly far apart late last week on stimulus legislation, Trump issued a set of four executive orders.

They call for:

—Continued payments of up to $400 a week of supplemental federal unemployment benefits for millions of Americans out of work during the outbreak.

—A payroll tax deferral that would allow employers to defer collecting the employee portion of the payroll tax, including the 6.2% Social Security tax on wages, effective Aug. 1 through the end of the year.

—The Treasury and Housing and Urban Development departments to find funds to help people struggling to pay their rent.

—Extension of a moratorium on student loans backed by the federal government that would have expired on Sept. 30 and that also forgave interest on the deferred payments.

Analysts questioned the impact of the orders, which appear certain to face legal challenges. Democrats called the move a pre-election ploy that would burden cash-strapped states, which may be expected to pick up more of the tab for unemployment benefits.

Trump issued the orders after congressional talks broke down. Democrats initially sought a $3.4 trillion package, but said they lowered their demand to $2 trillion. Republicans had proposed a $1 trillion plan.

Both the White House and congressional Democrats indicated Sunday they wanted to resume negotiations, but no talks were scheduled.

In other trading, U.S. benchmark crude oil gained 52 cents to $41.74 per barrel. Brent crude, the international standard for pricing, added 36 cents to $44.76 per barrel.

The dollar rose to 106.12 Japanese yen from 105.92 yen. The euro slipped to $1.1753 from $1.1789.