Global equity markets rose yesterday, bolstered by US economic data that was largely promising and signs that China will step in to support a cooling economy, while eurozone government bond yields fell on renewed bets the European Central Bank will ease policy next week.
The price of Brent crude oil was flat, near $108 a barrel, heading for the first weekly rise in five, helped by data showing a rise in US consumer spending in February.
Gold fell to six-week lows under $1,300 an ounce and was on track for a second straight weekly decline as the US economic outlook lifted the dollar and bolstered risk appetite.
Yields on intermediate-dated US Treasury notes neared two-month highs. Analysts and traders expected such debt to continue underperforming longer-term bonds after Federal Reserve Chair Janet Yellen’s indication last week that US interest rates could be hiked by spring 2015.
On Wall Street, all 10 major S&P 500 sectors gained in a broad rally after two days of losses.
Among the indexes, the Dow turned positive for the week and the S&P sharply cut weekly losses to show a gain for 2014. But the Nasdaq remained on track for a negative week after heavy profit-taking on some of the market’s biggest outperformers.
The Dow Jones industrial average was up 105.58 points, or 0.65 per cent, at 16,369.81. The Standard & Poor’s 500 Index was up 13.07 points, or 0.71 per cent, at 1,862.11. The Nasdaq Composite Index was up 29.53 points, or 0.71 percent, at 4,180.76.
For the week, the Dow was up 0.6 per cent; the S&P slipped 0.1 per cent, and the Nasdaq was down two per cent.
US consumer spending rose 0.3 per cent in February, matching economists’ expectations, the Commerce Department said, after gaining 0.2 percent in January.
The Thomson Reuters/University of Michigan’s consumer sentiment index dipped to 80.0 this month from 81.6 in February, a decline that did not faze investors. The index was little changed from earlier in March.
Equity markets were bolstered by Premier Li Keqiang’s comments that China had the necessary policies in place and would push ahead with infrastructure investment to shore up growth.
MSCI’s all-country world index rose 0.7 per cent, and the FTSE Eurofirst 300 index of regional European shares was up 0.7 per cent at 1331.67 points for its fourth straight day of gains.
Spanish, Italian, Portuguese and Irish bond yields fell to new historical lows as an unexpected drop in Spanish inflation bolstered expectations the ECB could ease monetary policy further.
Data showed that Spanish consumer prices fell 0.2 per cent year-on-year in March, compared with a previous reading of 0.0 per cent and a Reuters poll forecast of a 0.1 per cent rise.