U.S. Stocks Rise, Dollar Falls as Data Back Hike: Markets Wrap

U.S. stocks rose after jobs data cleared the way for the Federal Reserve to raise interest rates without forcing it to accelerate the pace for future tightening. The dollar fell versus the euro after European Central Bank policy makers were said to have considered their ability to tighten before a bond-buying program comes to an end.

The S&P 500 Index pared its first weekly loss in seven after U.S. employers added jobs at an above-average pace for a second month, bolstering confidence in the economy. The yield on 10-year Treasuries headed lower for the first time in 10 days, while the dollar retreated versus its major peers. The euro strengthened past $1.06 as a person familiar with the ECB meeting Thursday said officials discussed if it is possible to raise rates before stopping quantitative easing. Gold was little changed near $1,200 per ounce after four days of declines. Crude fell below $49 a barrel to cap its worst week since November.

Friday’s American jobs report is the last major piece of economic data before the Federal Reserve meets next week, with markets pricing a rate increase as a near certainty. While hiring was robust and wage gains strong, the pace might not be fast enough to force the central bank to accelerate its timeline for future rate hikes from the current forecast of three. European Central Bank President Mario Draghi signaled Thursday its accommodative bias may have reached an end as global growth picks up.

Here are the main market moves:

Stocks

  • The S&P 500 climbed 0.3 percent to 2,372.90 at 4 p.m. in New York, paring a weekly slide to 0.4 percent.
  • The Stoxx Europe 600 Index rose 0.1 percent to pare its loss in the five days to 0.5 percent. The FTSE 100 gained 0.4 percent Friday.
  • The MSCI Emerging Markets Index advanced 0.6 percent to pare its weekly drop.

Currencies

  • The Bloomberg Dollar Spot Index dropped 0.6 percent, trimming a gain in the week.
  • The euro gained 1.2 percent to $1.0699, rising a second day while the British pound was little changed at $1.2185.
  • The yen strengthened 0.2 percent to 114.692 per dollar to halt a fourth day of declines..

Bonds

  • The yield on the U.S. Treasury note due in a decade slipped three basis points to 2.58 percent.
  • It climbed five basis points Thursday to exceed the 2.6 percent mark that Bill Gross, the bond-market veteran at Janus Capital Management, said will signal the start of a bear market, should it hold on a weekly basis.
  • European bonds tumbled after the ECB meeting discussion was reported. German 10-year bund yields rose six basis points to 0.49 percent. Similar-maturity Italian bond yields added five basis points to 2.36 percent.
  • Governing Council members meeting on March 9 exchanged views on ways of communicating and sequencing an exit from unconventional stimulus, euro-area central-bank officials said, asking not to be identified because the deliberations were private.

Commodities

  • Oil fell below $49 a barrel in New York after surging U.S. supplies erased three months of gains that followed OPEC’s deal to cut output.
  • WTI crude sank 1.6 percent at $48.49 per barrel. It fell 2 percent on Thursday to the lowest close since Nov. 29.
  • Gold advanced 0.1 percent to $1,204 per ounce.
  • Copper rebounded from 2-month low as London Metal Exchange stockpiles ended the biggest surge in decades and workers at one of the world’s biggest mines in Peru voted to strike.

Bloomberg: Jeremy Herron, March 10, 2017

2017-03-10T14:59:24+00:00