Wall St set for weekly gain, monthly loss; Treasury yields advance
NEW YORK :U.S. stocks followed their European counterparts higher in a truncated, post-holiday session on Friday that was complicated by an outage at an exchange operator as investors closed the book on a tumultuous month and kicked off the holiday shopping season.
The three major U.S. stock indexes were modestly higher, benchmark Treasury yields strengthened, and gold advanced.
All three indexes appear set to log gains for the holiday-shortened week, on growing optimism that the U.S. Federal Reserve will cut interest rates at its December meeting. The indexes are on track for November losses, however, as risk appetite was soured during the month by the longest-ever U.S. government shutdown and simmering worries over inflated tech stock valuations.
It would mark the S&P 500's first monthly drop since April.
CME OUTAGE RESOLVED
An outage at CME Group, the world's largest exchange operator, caused mayhem in financial markets as trading was frozen on its currency platform and futures, affecting foreign exchange, commodities, Treasuries and stocks. The issue was resolved with less than an hour to go before the U.S. market opened.
"I think (the CME outage) has been brushed aside and we won't hear anything more about it," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "We'll see how it unwinds throughout the day, but I think volume will be very low."
U.S. equities trading ends at 1 p.m. ET (1800 GMT), while the bond market closes an hour later.
The crucial holiday shopping season is officially in full swing and appears to be off to a solid start. Overall online shopping on Thanksgiving rose 5.3 per cent, according to Adobe Analytics, and while other early sales figures were promising, an air of caution was expressed by some shoppers who are mindful of overspending when inflation remains elevated and the labor market seems to be softening.
"The outlook for the consumer this holiday season is mixed," Ghriskey said. "Fed futures indicate a 25-basis-point cut on the Fed funds rate, but that percentage will bounce around between now and the Fed meeting. There's certainly some concern about the consumer and the economy."
The Dow Jones Industrial Average rose 278.31 points, or 0.59 per cent, to 47,705.43, the S&P 500 gained 25.45 points, or 0.37 per cent, to 6,838.06 and the Nasdaq Composite added 82.56 points, or 0.36 per cent, to 23,297.70.
European shares reversed earlier losses and were last modestly higher as rising bets of a Fed rate cut and progress toward a Russia-Ukraine ceasefire buoyed sentiment.
MSCI's gauge of stocks across the globe rose 3.02 points, or 0.30 per cent, to 1,003.72.
The pan-European STOXX 600 index rose 0.23 per cent, while Europe's broad FTSEurofirst 300 index gained 5.58 points, or 0.24 per cent.
Emerging market stocks fell 3.17 points, or 0.23 per cent, to 1,367.22. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.3 per cent, to 703.50, while Japan's Nikkei rose 86.81 points, or 0.17 per cent, to 50,253.91.
The dollar was heading for its worst weekly performance since late July on rising odds of further monetary easing from the Fed.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was essentially unchanged, with the euro down 0.03 per cent at $1.1591.
Against the Japanese yen, the dollar strengthened 0.01 per cent to 156.32.
In cryptocurrencies, bitcoin gained 1.11 per cent to $92,417.72. Ethereum rose 1.14 per cent to $3,068.57.
U.S. Treasury yields advanced on a low-volume day.
The yield on benchmark U.S. 10-year notes rose 3.3 basis points to 4.031 per cent, from 3.998 per cent late on Wednesday.
The 30-year bond yield climbed 3.6 basis points to 4.6795 per cent from 4.644 per cent late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.3 basis points to 3.504 per cent, from 3.481 per cent late on Wednesday.
Oil prices were mixed as futures resumed trading after the CME outage. Investors kept an eye on protracted peace negotiations between Russia and Ukraine and looked ahead to the outcome of an OPEC+ meeting on Sunday for clues regarding potential output changes.
U.S. crude rose 0.95 per cent to $59.21 a barrel and Brent fell to $63.29 per barrel, down 0.08 per cent.
Gold prices were poised for a monthly gain on Fed rate cut optimism. Spot gold rose 0.99 per cent to $4,198.09 an ounce. U.S. gold futures rose 0.8 per cent to $4,198.50 an ounce.
