US Stocks May Extend Gains on Continued Treasury Yields Pullback

February 26, 2018
US Stocks report

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Monday, with stocks poised to extend the rally seen last Friday.

Early buying interest may be generated by reaction to a continued drop by treasury yields, as the ten-year yield is pulling back further off the ten-year closing high set last Wednesday.

Trading activity may be somewhat subdued, however, with traders looking ahead to the release of several key economic reports.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of January.

Reports on durable goods orders, consumer confidence, pending home sales, personal income and spending and manufacturing activity are also likely to attract attention in the coming days.

Additionally, new Federal Reserve Chair Jerome Powell is scheduled to deliver his semi-annual monetary policy report to Congress this week.

Traders are likely to keep a close eye on Powell?s remarks amid lingering concerns about the outlook for interest rates.

After initially moving higher, stocks saw further upside over the course of the trading session on Friday. The major averages showed a significant advance after ending the previous session on opposite sides of the unchanged line.

The major averages ended the session at their best levels of the day. The Dow jumped 347.51 points or 1.4 percent to 25,309.99, the Nasdaq soared 127.31 points or 1.8 percent to 7,337.39 and the S&P 500 shot up 43.34 points or 1.6 percent to 2,747.30.

With the rally on the day, the major averages moved higher for the week. The Nasdaq surged up by 1.4 percent, while the S&P 500 and the Dow rose by 0.6 percent and 0.4 percent, respectively.

A continued drop by treasury yields contributed to the rally on Wall Street, with the ten-year yield pulling back further off the four-year closing high set on Wednesday.

The continued rebound by treasuries came as the Federal Reserve issued its monetary policy report to Congress, with the central bank hinting that it still plans three interest rates hikes in 2018.

“The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the Fed said, suggesting a gradual pace of rate hikes.

Light trading activity may have exaggerated the upward move, as some traders stayed on the sidelines amid a lack of major U.S. economic data.

Oil service stocks showed a significant move to the upside on the day, driving the Philadelphia Oil Service Index up by 2.8 percent. The strength among oil service stocks came amid a notable increase by the price of crude oil.

Considerable strength was also visible among utilities stocks, as reflected by the 2.6 percent jump by the Dow Jones Utilities Average. The interest rate-sensitive sector likely benefited from the continued pullback by treasury yields.

Semiconductor, natural gas, biotechnology, and telecom stocks also moved notably higher on the day, reflecting broad based buying interest on Wall Street.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Leave a Reply

Baru Tasks Oil Workers to Solve Industry Problems
Previous Story

Baru Tasks Oil Workers to Solve Industry Problems

European Stocks Jump as Investors Anticipate Hike in UK Interest Rates
Next Story

European Stocks Jump as Investors Anticipate Hike in UK Interest Rates

Latest from Economy

Don't Miss