U.S. stocks rose Friday as Treasury yields took a breather after a week of rises on fears that the Federal Reserve will keep interest rates higher for longer to control persistent inflation.
* Wall Street indexes have had a volatile start to March after recent economic data pointed to rising commodity costs and a resilient labor market, without showing the impact the central bank wants from its monetary tightening measures.
* The yield on 10-year U.S. Treasury bonds was down on Friday after touching a four-month high in the previous session, but remained above 4%. [US/]
* “What is driving the optimism despite the new data we received in contrast to January is that investors remain open to a 25 basis point hike at the next Fed meeting,” said Guido Petrelli, chief executive of Merlin Investor.
* “Market volatility will continue in March until we have consistent data in terms of a slowdown in the economy, but without opening recession concerns,” he added.
* Offering some respite to stock markets Thursday, Atlanta Fed President Raphael Bostic said the impact of rate hikes on the economy may not begin to “bite” in earnest until this (northern) spring, an argument for the Fed to continue with “steady” quarter-point hikes.
* Hard-line comments from Fed policymakers and recent economic data have led traders to forecast at least three more 25 basis point rate hikes this year and to put interest rates at 5.43% in September, up from 4.66% now.
* The Dow Jones Industrial Average was up 79.56 points, or 0.24%, at 33,083.13, while the S&P 500 gained 18.74 points, or 0.47%, to 4,000.09. The Nasdaq Composite advanced 72.54 points, or 0.63%, to 11,535.52 units.
* Nine of the 11 major S&P sectors were up, with the communication services and technology indexes leading the gains.
* Apple Inc gained 1.9% after Morgan Stanley said the stock could rise more than 20% this year thanks to a possible hardware subscription.