US stocks mostly close higher due to lower Treasury yields
(RTTNews) – Following the mixed performance seen last Friday, stocks were mostly higher in Monday’s trading. The main averages have all moved upwards, with the highly technological Nasdaq showing a particularly strong lead.
The big averages gave back some ground before the close but remained in positive territory. The Dow Jones rose 103.23 points or 0.3% to 32,731.20, the Nasdaq jumped 162.30 points or 1.2% to 13,377.54 and the S&P 500 climbed 27.49 points or 0.7% to 3,940.59.
Wall Street’s strength came as traders closely watched activity in the bond market, with lower yields on Treasuries sparking buying interest in high-growth companies.
After hovering near its highest levels for over a year in the previous session, the yield on the ten-year benchmark fell back below 1.7%.
The drop in yields, which moves opposite to prices, came as Treasuries benefited from their appeal as a safe haven amid turmoil in the Turkish Lira and concerns over rising Covid cases -19 in Europe.
The Turkish lira fell to an all-time high against the US dollar after President Recep Tayyip Erdogan ousted central bank chief Naci Agbal for raising interest rates to contain double-digit inflation.
Overall trading activity has been somewhat subdued, however, as traders eagerly awaited two days of testimony to Congress by Federal Reserve Chairman Jerome Powell.
Powell is set to testify about the Coronavirus Aid, Relief and Economic Security Act, with the Fed chief appearing before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday .
In US economic news, the National Association of Realtors released a report showing that sales of existing homes in the United States fell much more than expected during the month of February.
NAR said existing home sales fell 6.6% to an annual rate of 6.22 million in February after edging up 0.2% to a revised downward rate of 6.66 million in February. January.
Economists expected existing home sales to fall 3.0 percent to a rate of 6.49 million from the 6.69 million originally reported for the previous month.
Semiconductor stocks showed significant upward movement on that day, with the Philadelphia Semiconductor Index surging 2.2%.
Software, hardware and biotechnology stocks also experienced considerable strength, contributing to the advance of the highly technological Nasdaq.
In contrast, airline stocks fell sharply, pushing the NYSE Arca Airline index down 4.1%.
Bank stocks also showed a noticeable downward movement that day, pushing the KBW Bank index down 2.3%.
In overseas trading, Asia-Pacific stock markets posted a mixed performance during trading on Monday. Japan’s Nikkei 225 index plunged 2.1%, while the Shanghai Composite Index in China jumped 1.1%.
The major European markets also ended the day mixed. While the French CAC 40 index fell 0.5%, the UK’s FTSE 100 index and the German DAX index both rose 0.5%.
In the bond market, Treasuries rose higher after ending last Friday’s trading almost unchanged. Subsequently, the yield on the ten-year benchmark, which moves opposite its price, slipped 4.8 basis points to 1.684%.
The testimony of Federal Reserve Chairman Jerome Powell before the House Financial Services Committee is expected to attract attention on Tuesday with a report on new home sales in February.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.