Wall Street rises on economic data, crude oil falls as inventories jump

Wall Street rises on economic data, crude oil falls as inventories jump

NEW YORK (Reuters) – U.S. stocks jumped to a sharply higher closing level and Treasury yields hit a two-week high on Wednesday as strong economic data, upbeat corporate guidance and easing geopolitical concerns boosted investors’ appetite for risk.

Crude futures fell in the first month after a report that US inventories of crude oil and gasoline rose unexpectedly last week.

All three major US stock indexes advanced and the tech-laden Nasdaq ended the session at a three-month high, with upbeat forecasts from PayPal (PYPL.O) and CVS Health Corp (CVS.N) fueling investor sentiment.

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“It’s about fundamentals, it’s about earnings and data,” said Oliver Burch, senior vice president at Welthspur Advisors in New York. “We saw good earnings, there was strong economic news, and we had many (officials) Feds reassured that the Fed would be able to get inflation under control.”

Economic data showed an unexpected acceleration in services activity and a strong increase in factory orders, indicating that the economy is healthy enough to withstand the tight monetary policy from the US Federal Reserve. Read more

St. Louis Fed President James Bullard underlined that hawkishness by emphasizing the central bank’s intent to be “tight” on inflation until it cools down to the Fed’s average annual target of 2%. Read more

US House of Representatives Speaker Nancy Pelosi has concluded a short visit to Taiwan that angered China. Read more

The Dow Jones Industrial Average increased 416.33 points, or 1.29%, to 32,812.5 points, the Standard & Poor’s 500 increased 63.98 points, or 1.56%, to 4,155.17 points, and the Nasdaq Composite increased 319.40 points or. 2.59% to 12668.16.

European shares closed higher, recovering losses incurred in recent sessions as a streak of upbeat earnings helped investors weather disappointing economic data in the euro zone. Read more

The STOXX All-European 600 Index (.STOXX) is up 0.51% and the MSCI Measure of Stocks Worldwide (.MIWD00000PUS) is up 1.01%.

Emerging market shares rose 0.28%. MSCI’s broadest index of Asia Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.27% higher, while Japan’s Nikkei (.N225) was 0.53% higher.

The decline in oil prices accelerated after a report from the US Energy Information Administration showed an unexpected rise in US crude oil and gasoline stocks, which followed the announcement by the OPEC + group of crude oil producers that it would increase its production by only 100,000 barrels per day. Read more

“Oil is still 25% higher than the start of the year,” Porsche added. “This latest drop is a combined consequence of that and a reflection that there will be an economic slowdown. The market is trying to find a balance.”

US crude fell 3.98 percent to settle at $90.66 a barrel, while Brent crude settled at $96.78 a barrel, down 3.74 percent during the day.

US Treasury yields rose to two-week highs backed by stronger-than-expected data, which supported recent statements from Federal Reserve officials.

“Hand-down comments from the Fed, which adhere to their intention to raise interest rates, are moving yields again,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “The Federal Reserve is sticking to the policy it formulated.”

The benchmark 10-year note was recently up 11/32 in price to 2.7028% from 2.741% late Tuesday.

The price of the 30-year bond last rose 24/32 to 2.9461% from 2.984% late Tuesday.

The dollar was volatile, but recently settled near a basket of global currencies, building on Tuesday’s gains after economic indicators surprised the upside, which supported the dollar in the wake of the Federal Reserve’s latest comments. Read more

The dollar index rose 0.13%, with the euro advancing 0.04% to $1.0168.

The Japanese yen was down 0.55% against the dollar at 133.90 per dollar, while the British pound was last traded at $1.2145, down 0.22% on the day.

Gold rallied but gains in the safe-haven metal were kept in check by rising Treasury yields. Read more

And the spot gold price rose 0.3 percent to 1765.06 dollars an ounce.

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Stephen Kolb reports. Additional reporting by Danilo Masoni in Milan. Editing by David Evans, Will Dunham and Angus McSwan

Our Standards: Thomson Reuters Trust Principles.

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