NEW YORK (Reuters) – A technical rally pushed the S&P 500 to a record high on Thursday’s close, and Treasury yields continued to pull back from recent peaks as market participants digested the Federal Reserve’s vow to stay on course with its pigeon-money policies.
The Nasdaq was in the lead, climbing more than 1%, but the Dow’s blue-chip gains were more modest. [.N]
“It’s a bit like a Fed-driven day when we go back to their comments yesterday about rates staying low for a long period of time – we can see that interest rate-sensitive stocks like technology are benefiting from this.” said Jeff Carbone, managing partner. at Cornerstone Wealth in Huntersville, North Carolina.
“There are really no major driving forces at this time,” until next week’s reporting season, he added.
European stocks closed at record highs amid growing optimism about the stimulus-driven global economic recovery and assurances from the Fed.
“For a long time Europe couldn’t get out of its way,” said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia. “It’s nice to see how it gains momentum a little.
“Now is the time for value stocks and European indices are overflowing with them,” Cox added.
The minutes of the latest Fed policy meeting, released on Wednesday, showed that board members believe the economy is still below target and reaffirmed its adaptive monetary stance.
“The Fed has said it is monitoring inflation and has tried a little not to interfere with the situation,” Cox said. “The market got what it wanted from the Fed.”
Fed Chairman Jerome Powell elaborated on the topic on Thursday at an International Monetary Fund event, saying that while the opening of the economy could result in a short-term spike in prices, he expects it to be a temporary spike and not lead to inflation.
A US Labor Department report showed that jobless claims rose unexpectedly last week, marking a blot in a string of generally upbeat recent economic data.
The Dow Jones Industrial Average rose 57.31 points, or 0.17%, to 33,503.57, the S&P 500 added 17.22 points, or 0.42%, to 4097.17, and the Nasdaq Composite added 140.47 points, or 1.03%, to 13829.31.
The pan-European STOXX 600 index rose 0.58%, while the MSCI stock index worldwide gained 0.48%.
Emerging market shares rose 0.34%. The broadest Asia-Pacific stock index outside Japan, MSCI, closed up 0.55%, while Japan’s Nikkei shed 0.07%.
US Treasury yields fell on Thursday under pressure from Powell’s soft comments and weaker-than-expected weekly initial jobless claims.
The benchmark 10-year bond last rose 9/32 to 1.6244%, up from 1.654% late Wednesday.
30-year bonds were last up 13/32 to 2.3168%, up from 2.336% late Wednesday.
The dollar fell to a two-week low against a basket of currencies, tracking Treasury yields following a surprise surge in US jobless claims.
The dollar index fell 0.42%, the euro rose 0.36% to $ 1.1913.
The Japanese yen gained 0.54% against the US dollar to hit 109.28 per dollar, while the pound sterling last traded at $ 1.3733, down 0.01% on the day.
Crude oil prices remained largely unchanged as a Wall Street rally and a weak dollar dampened fears of a sharp jump in US gasoline inventories.
US crude fell 0.28% to $ 59.60 a barrel, while Brent crude closed at $ 63.20 a barrel, up 0.06% on the day.
Gold prices jumped to a one-month high as assurances from the Fed that they would maintain their adjustment policies put pressure on Treasury and dollar yields.
Spot gold added 1.1% to $ 1,756.36 an ounce. US gold futures climbed about 1% to $ 1,758.2.
Steven Culp reporting; additional reporting by Hugh Jones; Edited by Dan Grebler