- US Treasury yields slide after rally
- Seagen takes a swipe at Pfizer buyout report
- Union Pacific is stepping back as CEO
- Dow up 0.43%, S&P 500 up 0.58%, Nasdaq up 0.94%
NEW YORK, Feb 27 (Portal) – US stocks edged higher on Monday as investors hunted for bargains after last week’s losses, the biggest percentage declines of 2023 for major benchmarks, over possible rate hikes trembled to tame stubbornly high inflation .
Each of the three major indices rose more than 1% just after the opening bell, in part due to a fall in Treasury yields. Stocks then gave up some gains as yields fell from daily lows. The two-year Treasury note yield, which normally moves in step with interest rate expectations, slipped after hitting a near four-month high.
“A little jump because Friday’s reaction was an overreaction,” said Ken Polcari, a managing partner at Kace Capital Advisors in Boca Raton, Fla.
“If inflation doesn’t subside and it continues to rise over the next few months, (the Fed) could absolutely force it higher. The realization now is that there will be no turning point this year, and the people who still believe turning point is coming this year need their heads examined.”
The Dow Jones Industrial Average (.DJI) was up 141.43 points, or 0.43%, to 32,958.35, the S&P 500 (.SPX) was up 23.19 points, or 0.58%, to 3,993.23 and the Nasdaq Composite (.IXIC) was up 107.45 points, up 0.94% at 11,502.39.
Last week, the Dow Industrials fell by the largest weekly percentage since September, and the S&P 500 and Nasdaq posted their largest weekly percentage declines since December, as economic data and comments from Federal Reserve officials reinforced expectations that the central bank will become more aggressive Interest charges.
Economists at UK-based banks Barclays and NatWest believe the Fed could increase the pace of its rate hikes in March with a half-point hike. Morgan Stanley said it sees no more rate cuts by the Fed this year and expects a slower pace of 25 basis points when the central bank starts cutting rates.
Fed fund futures show traders are pricing in a third 25 basis point hike this year and expect rates to peak at 5.4% by September.
Fed Governor Philip Jefferson said he had “no illusions” that inflation would quickly return to target and was committed to maintaining tight monetary policy for as long as needed.
Data showed that new orders for key US-made capital goods rose more-than-expected in January, while core goods shipments rebounded, suggesting that business spending on equipment rose.
Falling yields helped growth stocks (.RLG) rebound 0.91%, while Tesla (TSLA.O) gained 6.14% after the electric carmaker announced its plant in Brandenburg, near Berlin, is producing 4,000 cars a week , three weeks ahead of schedule, according to a recent study. Production schedule reviewed by Portal.
Seagen Inc (SGEN.O) surged 9.73% after The Wall Street Journal reported that Pfizer (PFE.N) was in early talks to acquire the biotech. Pfizer shares lost 1.69%.
U.S. rail operator Union Pacific (UNP.N) rose 10.08% as Chief Executive Lance Fritz announced his resignation. The hedge fund Soroban Capital Partners had called for its downfall.
Rising issues predominated on the NYSE at a 2.30 to 1 ratio; on the Nasdaq, a 1.66 to 1 ratio favored movers.
The S&P 500 posted four new 52-week highs and five new lows; the Nasdaq Composite posted 58 new highs and 82 new lows.
Reporting by Chuck Mikolajczak; Editing by David Gregorio
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