Dollar and global equity markets climb, Amazon boosts US stocks
NEW YORK (Reuters) – The US dollar climbed to a twomonth high against the yen on Monday, and global equity markets rallied, lifted by robust economic data from Germany and renewed interest in US technology stocks spurred by an Amazon Prime online sale event.
The dollar rose after the Bank of Japan offered last week to buy an unlimited amount of bonds and following an unexpected drop in May in Japanese machinery orders that pressured the yen.
Stocks on Wall Street edged higher as gains in technology outweighed losses in health care. Five of 11 major S&P sectors rose, with the health-care index down 0.21% and the info-tech index up 0.62%.
Amazon, lifted by its online sale event, contributed the most points to the benchmark S&P 500, followed by gains in Facebook, Microsoft, Apple and Nvidia Corp. Amazon rose 1.7% to $995.46.
Investors, especially ETF traders who like sectors, have tried in recent weeks to establish new leadership in the US equity market, but they have returned to the technology sector, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
“The biggest motivating thing in today’s market, and it’s certainly thin trading, is the Amazon Prime day, which has gotten people interested in Amazon again,” he said.
In late-morning trading, the Dow Jones Industrial Average rose 10.54 points, or 0.05%, to 21,424.88, the S&P 500 gained 3.18 points, or 0.13%, to 2,428.36, and the Nasdaq Composite added 13.39 points, or 0.22%, to 6,166.47.
Stock markets advanced around the world as well. The pan-European FTSEurofirst 300 index of leading regional shares rose 0.46%, while MSCI’s gauge of global stocks gained 0.29%.
Surprisingly strong data on German exports in May lifted German equities and provided a bounce for European shares. The data show a strong German economy ahead of a September 24 election in which Chancellor Angela Merkel is seeking a fourth term.
The dollar index, which tracks the greenback against six major rivals, was up 0.07% to 96.073. The dollar was up 0.17% to 114.07 yen after hitting 114.29 yen, its highest since May 11, earlier in the session.
“The dollar has been broadly supported over the past couple of days and is showing some mild signs of recovery after weakness in the prior week,” said Erik Nelson, a currency strategist at Wells Fargo Securities in New York.
US Treasury yields slipped after rising for more than a week, in line with weakness in European bond markets. Investors consolidated positions following a strong US nonfarm payrolls report that has kept the Federal Reserve on track toward raising interest rates at least once more this year.
US long-dated yields, which move inversely to prices, fell for just the second time in nine days.
“This is mostly consolidation given there’s not a lot of data,” said Bruno Braizinha, an interest-rate strategist at Societe Generale in New York.
Euro-zone bond yields fell, with investors buying back bonds after a two-week selloff. The yield on Germany’s 10-year government bond, the benchmark for the region, was headed for its biggest one-day fall in almost four weeks, down 4 basis points to 0.54%.
In late-morning trading, benchmark 10-year Treasury yields fell to 2.3659%, from 2.393% last Friday. After Friday’s jobs report, US 10-year yields hit an eight-week high of 2.398%.
Crude oil rebounded. Brent crude futures were last up 33 cents to $47.04 a barrel, while US crude futures were last up 30 cents to $44.53 a barrel.