Stocks recovered yesterday as investors chose to look beyond US President Donald Trump’s setback on healthcare reform and awaited comments from several Federal Reserve officials, including Fed Chair Janet Yellen.
The dollar steadied as the promise of more rises in Federal Reserve interest rates this year helped it recover from multi-month lows hit on Monday, and US Treasury debt prices inched lower after strong US consumer confidence data.
Advancing shares in Asia and Europe helped boost the MSCI’s all-country world equity index, which hit a near-two-week low on Monday. The index was up 0.52 per cent.
The index found further support after Wall Street stocks inched higher, boosted by financials, after a survey showed US consumers’ confidence in the economy rose in March to its highest level since December 2000. The cut-off date for the survey was March 16.
“This market is driven by two things – the hope of policy agenda getting put into place and improving fundamentals,” said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
Investors were awaiting Fed Chair Janet Yellen’s speech at a conference in Washington, where she could provide some insight into the timing of the central bank’s next interest rate hike.
The Dow Jones Industrial Average rose 76.87 points, or 0.37 per cent, to 20,627.85, the S&P 500 gained 9.31 points, or 0.40 per cent, to 2,350.9 and the Nasdaq Composite added 12.33 points, or 0.21 per cent, to 5,852.70.
European shares rose, boosted by strong results and deal-making across the region. Europe’s broad FTSEurofirst 300 index was up 0.61 per cent at 1,488.02.
US Treasury debt prices slipped in generally below-average volume after data showed US consumer confidence at a 16-year high.
“This is an impressive gain... and a notable disconnect with 10-year yields under 2.38 per cent, but it surely reflects the ongoing bid for equities,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets in New York.
Benchmark 10-year notes were flat to up in price, after trading higher all morning, to yield 2.368 per cent, down slightly from 2.375 per cent on Monday.
The dollar steadied broadly as a general risk-off mood in currency markets offset comments from Federal Reserve officials that suggested the US central bank was poised to continue its rate-hike cycle.
The dollar index was trading little changed in a volatile session, after hitting a four-and-a-half month low on Monday.
In emerging markets, the South African rand fell after Finance Minister Pravin Gordhan was ordered home by the president, triggering speculation of an imminent cabinet reshuffle.
A severe disruption to Libyan oil supplies and comments from officials suggesting OPEC could extend its production cuts deal to the end of the year boosted oil prices.
Brent crude was up 0.88 cents, or 1.73 per cent, at $51.63 a barrel.
Yesterday, US crude was up 0.81 cents, or 1.7 per cent, at $48.54 per barrel.