US Treasury yields fell yesterday after weak US data on retail sales and consumer sentiment, while oil and gold prices also fell with bullion headed for its worst week in two months as concerns eased about a potential strike against Syria.
Most US and European stock indexes rose, though an index for global stocks hugged break-even as investors looked ahead to next week’s key policy meeting of the US Federal Reserve.
Analysts expect the Fed to begin to dial back its $85 billion a month in bond purchases, a programme that has restrained interest rates and boosted the price of risk assets.
US consumer confidence ebbed early this month and retail sales advanced just slightly in August, the latest indications of an economy barely chugging ahead.
The sluggish pace of activity was underscored by another report yesterday showing an energy-led rise in wholesale prices last month, with underlying inflation pressures subdued.
US stocks will remain range-bound until after the Fed meeting and the ongoing US-Russian talks on Syria and the looming fiscal crisis in Washington are resolved, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
European equities advanced for a second straight week and set a three-and-a-half-month high, with merger and acquisition activity in the healthcare and media sectors underpinning the market.
The FTSEurofirst 300 index leading European shares rose 0.24 per cent to close at 1,250.26.
Gold was down 5.4 per cent for the week, the worst since June, after heavy selling linked to the expectations of a Fed rollback and an easing of tensions over Syria.
Gold was quoted at $1,308.74 an ounce, down 0.9 per cent, and has now declined by about 21 per cent this year after 12 consecutive annual gains.
The dollar was up 0.05 per cent against a basket of major currencies while 10-year US Treasury yields fell to 2.8883 per cent, up 4/32 in price.
Brent crude oil fell, on track for its steepest weekly decline since June, as fears receded about an imminent military strike on Syria.
Brent was down about 3.5 per cent since last Friday. The international benchmark has slid about $5 a barrel since the end of August, when it jumped above $117 amid worries that a possible US attack on Syria could lead to more violence in the region.
The Brent crude futures contract for October, which expired yesterday, fell 40 cents to $112.23 a barrel, and US crude shed 83 cents to $107.77 a barrel,
The Dow Jones industrial average was up 71.35 points, or 0.47 per cent, at 15,371.99. The Standard & Poor’s 500 Index was up 4.33 points, or 0.26 per cent, at 1,687.75. The Nasdaq Composite Index was up 4.60 points, or 0.12 per cent, at 3,720.57. (Reuters)