Wall Street yields retreat, set for weekly gain

  • Treasury yields fall after rally
  • Indexes are set for weekly profit
  • Indexes: Dow 0.67%, S&P 1.03%, Nasdaq 1.29%

March 3 (Reuters) – U.S. stock indexes rose on Friday, on course for weekly gains, as Treasury yields took a breather from a week-long rally fueled by concerns that the Federal Reserve will keep interest rates on hold for too long to rein in stubbornness. inflammation

Trade softened this month after economic data pointed to rising raw material costs and a resilient labor market, with the U.S. Federal Reserve yet to see the desired impact of its monetary policy on inflation.

U.S. 10-year Treasury yields fell on Friday after touching a four-month high in the previous session, but were near the 4% level.

A survey by the Institute for Supply Management showed the U.S. services sector showed steady growth in February, with new orders and employment rising more than a year earlier, indicating the economy continued to expand in the first quarter.

“The ISM (survey) came in close to expectations, but it still indicates growth,” said John Augustine, chief investment officer at Huntington National Bank.

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“Today’s look at long-term yields is surprising, but recession fears appear to be easing and expectations for Fed tightening remain unchanged.”

U.S. stocks closed higher on Thursday after Atlanta Fed President Rafael Bostic said the impact of higher rates on the economy will begin to “bite” in earnest this spring, an argument for the central bank’s “sustainable” quarter-point rate hike.

All three major indexes were set for weekly gains, with the Dow set for its first weekly high of five.

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Hawkish comments from central bank policymakers and recent economic data have led traders to rate at least three 25-basis-point rate hikes this year. And interest rates have risen from 4.66% currently to 5.46% by September.

The odds of a 50 basis point rate hike in March were just 20%, but investors are looking ahead to monthly wages and consumer prices data to see if the Fed will move bigger later this month.

The central bank is “keenly aware” of the challenges high inflation poses to the economy and is “strongly committed” to its 2% target, the central bank said in its latest semiannual report on monetary policy and the economy to Congress.

At 11:56 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 221.75 points, or 0.67%, at 33,225.32, and the S&P 500 (.SPX) was up 41.12 points, or 1.03%, at 47,022. Composite (.IXIC) was up 148.13 points, or 1.29%, at 11,611.12.

The S&P 500 was trading above its 200-day moving average, seen as a key support level by traders for the second session.

Apple Inc ( AAPL.O ) rose 2.7% after Morgan Stanley said it could gain more than 20% this year on the back of potential hardware subscriptions.

Meanwhile, Costco Wholesale Corp ( COST.O ) fell 3.1% as the members-only retail chain missed second-quarter earnings estimates as consumers cut spending amid high inflation.

Broadcom Inc ( AVGO.O ) rose 4.8% after the chipmaker forecast second-quarter earnings that beat analysts’ estimates as increased investments in AI fueled demand for chips.

Advancing issues outnumbered decliners by a 3.83-to-1 ratio on the NYSE and 1.92-to-1 on the Nasdaq.

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The S&P index posted 17 new 52-week highs and two new lows, while the Nasdaq posted 59 new highs and 43 new lows.

Shruti Shankar reports in Bangalore; Cinematography by Anil de Silva and Shinjini Ganguly

Our Standards: Thomson Reuters Trust Principles.

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