World stock indices rose yesterday and European bond yields fell on expectations of more stimulus from the European Central Bank and on strong US data.
The benchmark S&P 500 hit a fresh record above 2,000 after first breaching that milestone on Monday.
Speculation grew that the European Central Bank is preparing a programme of large-scale asset purchases to weaken the euro and try to jump-start growth in the struggling eurozone.
Those expectations have bolstered European bond and stock markets since Friday, when ECB President Mario Draghi hinted at a policy shift in a speech in Jackson Hole, Wyoming.
“Draghi’s readiness to do more is providing the necessary boost for equity indexes,” said Ashraf Laidi, chief global strategist at City Index. “Buying on the dips does remain the path of least resistance in the absence of any destabilising factor.”
MSCI’s all-country world index rose 0.3 per cent.
In Europe, the broad FTSEurofirst 300 index added 0.68 per cent. The 10-year German bund yield was last at 0.946 per cent, down from 0.955 per cent late on Monday.
Strong US data on durable goods orders and consumer confidence underpinned gains in US stocks. Data showed US consumer confidence rose more than expected in August, climbing to its highest since October 2007.
US durable goods orders jumped 22.6 per cent in July, the biggest gain on record, though the number was skewed by strong international demand for aircraft. Excluding transportation, orders fell 0.8 per cent.
The Dow Jones industrial average was up 67.94 points, or 0.40 percent, at 17,144.81.
The Standard & Poor’s 500 Index was up 6.46 points, or 0.32 per cent, at 2,004.38.
The Nasdaq Composite Index was up 13.33 points, or 0.29 per cent, at 4,570.67.
The benchmark 10-year US Treasury note slipped 1/32 in price to yield 2.39 per cent.
“It’s tough for Treasuries to sell off here given what’s going on in Europe,” said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.
The euro edged higher against the dollar after traders took profits on the greenback’s recent gains. The euro was last up 0.12 per cent, at $1.3207.
Brent crude was last up 20 cents at $102.85 a barrel.
US crude was last up 59 cents at $93.94.