World stock markets advanced as technology and retail stocks rebounded from recent declines and US Treasury yields rose in the wake of hawkish comments from a Federal Reserve official.
The tech sector, up 1.4 per cent, pushed equity indexes on Wall Street higher, with the Dow and S&P 500 hitting intraday records.
The group had fallen 3.4 per cent over the past two weeks.
“Some of it is folks taking a second look at names that may have been unduly punished in the rotation out of tech that started about ten days ago,” said David Lefkowitz, senior equity strategist at UBS in New York, yesterday.
Retailers in Europe, up 0.8 per cent, and the US, up 0.7 per cent, recouped some losses suffered in the wake of news on Friday of Amazon’s $13.7 billion deal to buy upscale grocer Whole Foods Market.
It was Amazon’s first major brick-and-mortar acquisition in the sector and already-struggling retailers were hit hard by the prospect of having a well-known disruptor as a competitor.
The Dow Jones Industrial Average rose 97.13 points, or 0.45 per cent, to 21,481.41, the S&P 500 gained 15.46 points, or 0.64 per cent, to 2,448.61 and the Nasdaq Composite added 70.77 points, or 1.15 per cent, to 6,222.53.
A gain in Europe’s banks, up 1.5 per cent, also boosted European shares in the wake of broker upgrades for Credit Suisse.
The pan-European FTSEurofirst 300 index rose 0.96 per cent and MSCI’s gauge of stocks across the globe gained 0.62 per cent.
The US dollar and Treasury yields moved higher after comments from New York Federal Reserve President William Dudley that reinforced expectations the central bank will continue on its path of tightening monetary policy.
The dollar index, tracking the greenback against a basket of key currencies, rose 0.22 per cent, with the euro down 0.28 per cent to $1.1166.
Benchmark 10-year notes last fell 5/32 in price to yield 2.174 per cent, from 2.157 per cent late on Friday.
The Fed raised rates last week and said it would begin cutting its holdings of bonds and other securities this year.
The stronger dollar weighed on gold prices, but losses were curbed by uncertainty as talks commenced on the terms of Britain’s departure from the European Union.
Britain’s negotiators came to Brussels seeking a “new, deep and special partnership with the European Union” yesterday as talks on the unprecedented British withdrawal from the bloc finally got under way.
Oil prices managed to steady after four straight weeks of declines sparked by rising production in the United States, Libya and Nigeria, which had taken the edge off an Opec-led initiative to cut output to support the market.
US crude rose 0.29 per cent to $44.87 per barrel and Brent was last at $47.58, up 0.44 per cent on the day. (Reuters)