Wall Street bucks global rally as bond yields rise
economictimes.indiatimes.comWall Street shares pulled back from record highs hit early on Thursday in sympathy with rallying overseas indexes, as Treasury yields shook off soft U.S. data and rose anticipating new supply next week.
The dollar firmed, as higher U.S. yields widened differentials with non-dollar rates that are trending lower. It drew closer to the 160 yen area that prompted Tokyo to intervene in late April to support its currency.
The Dow Jones Industrial Average was the only major index that held gains. The S&P 500 and Nasdaq extended their string of intraday all-time highs before reversing, and the Nasdaq ended a seven-session streak of record closing highs.
Disappointing housing starts and building permits data, along with a jobless claims report suggested a gradual cooling in the labor market, appeared to make the case that the Fed's restrictive policy is having its intended effect.
«The weaker-than-expected economic data is suggesting that the higher-for-longer interest rates are achieving the Fed's objectives,» said Greg Bassuk, chief executive officer at AXS Investments in New York. «These signs of a slightly slowing economy are going to be welcomed by the Fed as they consider a move toward interest rate cuts.»
This, combined with dovish sentiment expressed by the Bank of England as it held off easing before the looming British general election, and an interest rate cut by the Swiss National Bank, seemed to give the Fed some maneuvering room over the timing of its first interest rate cut.
Minneapolis Federal Reserve
