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Wall Street advances as Treasury yields dip, dollar softens

European stocks closed at all-time highs on growing optimism about a global stimulus-driven economic revival
Last Updated 08 April 2021, 20:48 IST

Technology shares led Wall Street higher on Thursday and Treasury yields extended their pull-back from recent peaks as market participants digested the US Federal Reserve's vow to stay the course with its dovish monetary policy.

The Nasdaq was around 1 per cent higher and the S&P 500 was on course to hit a new record high. The blue-chip Dow was up more modestly, its gains capped by financials and industrials.

"Interest rates have backed off and moderated, and reignited the interest in technology shares," said Jamie Cox, managing partner for Harris Financial Group in Richmond, Virginia.

European stocks closed at all-time highs on growing optimism about a global stimulus-driven economic revival and reassurances from the Fed.

"Europe has not been able to get out of its own way for a long time," Cox added. "It's nice to see it pick up a bit."

"Now is the time for value stocks and European indices are chock full of them."

Minutes of the Fed's last policy meeting, published on Wednesday, showed board members felt the economy was still short of target and reiterated their accommodative monetary stance.

"The Fed have said they are watching inflation and took the air out of the situation quite a bit," Cox said. "The market got what it wanted out of the Fed."

Fed Chairman Jerome Powell expanded on that topic on Thursday at an International Monetary Fund event, saying that, while a spending surge as the economy reopens could cause a momentary surge in prices, he expects it to be temporary and it will not constitute inflation.

A report from the US Labor Department showed jobless claims unexpectedly increased last week, a blemish among a string of otherwise upbeat recent economic data.

The Dow Jones Industrial Average rose 27.84 points, or 0.08 per cent, to 33,474.1, the S&P 500 gained 17.29 points, or 0.42 per cent, to 4,097.24 and the Nasdaq Composite added 133.59 points, or 0.98 per cent, to 13,822.43.

The pan-European STOXX 600 index rose 0.58 per cent and MSCI's gauge of stocks around the globe gained 0.51 per cent.

Emerging market stocks rose 0.37 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.6 per cent higher, while Japan's Nikkei lost 0.07 per cent.

US Treasury yields fell on Thursday, pressured by weaker-than-expected initial weekly jobless claims and continued short-covering following a sell-off in the last month that took benchmark 10-year rates to their highest levels in more than a year.

Benchmark 10-year notes last rose 6/32 in price to yield 1.6333 per cent, from 1.654 per cent late on Wednesday.

The 30-year bond last rose 8/32 in price to yield 2.3238 per cent, from 2.336 per cent late on Wednesday.

The dollar dropped to a two-week low against a basket of currencies, tracking Treasury yields following the surprise rise in US unemployment applications.

The dollar index fell 0.43 per cent, with the euro up 0.39 per cent to $1.1916.

The Japanese yen strengthened 0.57 per cent versus the greenback at 109.24 per dollar, while sterling was last trading at $1.3738, up 0.03 per cent on the day.

Crude oil prices were weighed down by a jump in US gasoline stocks, as demand remained sluggish despite signs of an economic rebound.

US crude fell 0.28 per cent to settle at $59.60 per barrel, while Brent was last at $63.19, up 0.05 per cent on the day.

Gold prices jumped, scaling a one-month peak as the Fed's assurances that it will maintain its accommodative policy weighed on Treasury yields and the greenback.

Spot gold added 1.0 per cent to $1,755.08 an ounce.

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(Published 08 April 2021, 20:48 IST)

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