US stocks rose yesterday as a weakening dollar and steadying commodity prices shifted investor sentiment from weak earnings and poor economic data in the first quarter to optimism about the second, also pushing US Treasury yields higher.

Wall Street shook off mixed manufacturing data to push equity markets higher, led by the consumer discretionary and financial sectors.

US manufacturing activity rose for a second straight month in April but at a slightly slower pace, as new orders and production fell.

The market was buoyed as investors looked forward to a more constructive economy where a feebler dollar will boost US exports, analysts said.

“I think we are at a turning point,” said Bernard Baumohl, managing director and chief global economist at the Economic Outlook Group in Princeton, New Jersey. “The stock market is a forward-looking mechanism, so you’re trying to estimate where sales and earnings will be over the course of the rest of the year, and that’s where we begin to see some sunlight.”

The Dow Jones industrial average rose 70.06 points, or 0.39 per cent, to 17,843.7, the S&P 500 gained 6.78 points, or 0.33 per cent, to 2,072.08 and the Nasdaq Composite added 1.78 points, or 0.04 per cent, to 4,777.14.

The MSCI’s measure of world stock indexes was flat after being dragged lower overnight by losses in Japan and China.

Japan’s Nikkei index fell 3.1 per cent, nearing a three-week low as the yen’s continued strength weighed on the profit outlook for exporters and other businesses that benefit from a weaker currency.

The yen climbed to 106.14 yen per dollar, its highest since October 2014, after the US Treasury put Japan on a new currency monitoring list along with four other countries that have large trade surplus­es with the United States. The report could make it harder for Japan to intervene in currency markets to stem the yen’s gains.

The yen had its biggest weekly rise since the 2008 financial crisis last week, thanks largely to a Bank of Japan (BOJ) policy meeting that gave no hint of further efforts to stimulate a long-moribund economy with more outright money-printing.

The dollar rebounded against the yen yesterday, rising 0.15 per cent, but was down against a basket of six major rivals, falling 0.6 per cent to 92.771, its lowest since January 2015.

US Treasury yields rose as investors favored stocks to safe-haven government debt. Benchmark 10-year notes fell 12/32 in price to yield 1.86 per cent, up from 1.82 per cent on Friday.

Crude prices fell two per cent as data showing higher Middle East oil production and record hedge fund buying sparked profit-taking on last month’s outsized rally.

Oil markets rose 20 per cent or more in April, with Brent having its largest monthly gain in seven years.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.