Stock indexes gain with US technology shares; yen strengthens
NEW YORK, Feb 9 : Stock indexes rose on Monday, with U.S. technology shares leading Wall Street higher, as investors sought bargains in markets beaten down last week, while the yen strengthened following the resounding election win of Japanese Prime Minister Sanae Takaichi.
U.S. technology shares extended Friday's gains after last week's sharp selloff. Software names in particular were pressured the previous week by concerns that artificial intelligence could intensify competition and squeeze margins.
The Nasdaq was up the most of the three major U.S. stock indexes.
There's "a kind of buy-the-dip mentality," going on in markets, said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut.
Investors awaited economic data this week that could shed light on the Federal Reserve's interest-rate path. The January U.S. nonfarm payrolls report is due on Wednesday, and the January consumer price index on Friday. Traders are now pricing in the year's first Fed rate cut in June, according to CME Group's FedWatch tool.
"The bottom line is consumer spending was certainly robust in Q4, the economy outperformed for the year and is likely to be on strong footing for this quarter, Q1, and that will be reflected in earnings," Pursche said. "The flip side of that is we are seeing persistent and kind of stubborn inflationary pressures, a weakening job market and a Fed that, at least in the short term, is on hold."
The Dow Jones Industrial Average rose 20.20 points, or 0.04 per cent, to 50,135.87, the S&P 500 rose 32.52 points, or 0.47 per cent, to 6,964.82 and the Nasdaq Composite rose 207.46 points, or 0.90 per cent, to 23,238.67.
The Dow on Friday closed above the 50,000 level for the first time.
MSCI's gauge of stocks across the globe rose 11.15 points, or 1.07 per cent, to 1,053.97, and hit a record high. The pan-European STOXX 600 index rose 0.7 per cent.
Earlier, stocks in Japan rose to record highs. Japan's Nikkei headlined the gains with a rise of 3.9 per cent, hitting all-time highs as a decisive majority for the ruling LDP party cleared the way for more spending and tax cuts.
The prospect of more borrowing pushed two-year Japanese government bond yields up to their highest since 1996 at 1.3 per cent.
The yen strengthened across the board, reversing six consecutive days of losses. It gained most notably against the dollar, which had recovered almost all of a steep slide against the Japanese currency in late January.
The dollar also weakened after Bloomberg reported that Chinese regulators have advised financial institutions to curb their exposure to U.S. Treasury bonds.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.8 per cent to 96.83, with the euro up 0.85 per cent at $1.1917.
Against the Japanese yen, the dollar weakened 0.91 per cent to 155.77.
British stocks and bonds had come under pressure as Prime Minister Keir Starmer faced calls to quit from his party's leader in Scotland after two key aides resigned in as many days. London's FTSE 100 stock index erased earlier falls and was last higher.
Britain's 10-year gilt yield touched 4.6 per cent earlier, while 30-year gilt yields briefly hit their highest since November.
U.S. Treasury yields rose early but then edged lower, ahead of this week's economic data releases.
The yield on benchmark U.S. 10-year notes fell 0.4 basis points to 4.202 per cent, from 4.206 per cent late on Friday.
In metals, spot silver climbed after trading last week below the all-time high of $121.64 hit on January 29. U.S. gold futures GCv1 for April delivery settled 2 per cent higher at $5,079.40 per ounce.
Oil gained after the U.S. Department of Transportation issued an advisory to U.S.-flagged vessels to stay as far as possible from Iranian territory while passing through the Strait of Hormuz and Gulf of Oman.
U.S. crude rose 81 cents to settle at $64.36 a barrel and Brent gained 99 cents to settle at $69.04.
