Yields fall, stocks jump after Fed official comments; oil eases
By Caroline Valetkevitch
NEW YORK (Reuters) -Global stock indexes advanced while Treasury yields slid on Tuesday as Federal Reserve officials suggested there may be no need for further interest rate hikes in the near term, and oil prices eased a day after gaining sharply on violence in Israel.
The Nasdaq and S&P 500 were up more than 1% by midday on Wall Street.
Atlanta Fed Bank President Raphael Bostic on Tuesday said the U.S. central bank does not need to raise rates any further, and sees no recession ahead.
Late on Monday, top-ranking Fed officials indicated that rising yields on long-term U.S. Treasury bonds, which directly influence financing costs for households and businesses, could keep the Fed from further increases in its short-term policy rate.
U.S. Treasury yields fell on the comments but also partly in reaction to continuing violence in the Middle East.
Cash Treasury markets had been closed for the Columbus Day U.S. holiday on Monday, so Tuesday morning was traders' first chance to react to Palestinian militants' surprise attack on Israel over the weekend as well as Fed officials' overnight comments.
On Tuesday, Israel hit the Gaza Strip with the fiercest air strikes in its 75-year conflict with the Palestinians, despite a threat from Hamas militants to execute a captive for each home hit.
Benchmark 10-year yields were on track for their largest daily drop since July, while those on the two-year were on pace for the biggest daily decline since late August. In late morning trading, U.S. 10-year yields were last down 10.6 basis points (bps) at 4.676%.
«We had dovish statements yesterday by Fed officials and then you have flight to safety here from the tragic events in Israel,» said Stan Shipley, managing
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