Wall Street advances as Treasury yields dip, dollar softens

NEW YORK (Reuters) – Technology shares led Wall Street higher on Thursday and Treasury yields extended their pull-back from recent peaks as market participants digested the U.S. Federal Reserve’s vow to stay the course with its dovish monetary policy.

FILE PHOTO: A man walks past the New York Stock Exchange on the corner of Wall and Broad streets in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson/File Photo

The Nasdaq was around 1% 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. [.N]

“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 U.S. 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%, to 33,474.1, the S&P 500 gained 17.29 points, or 0.42%, to 4,097.24 and the Nasdaq Composite added 133.59 points, or 0.98%, to 13,822.43.

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

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

U.S. 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%, from 1.654% late on Wednesday.

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

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

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

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

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

U.S. crude fell 0.28% to settle at $59.60 per barrel, while Brent was last at $63.19, up 0.05% 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% to $1,755.08 an ounce.

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