US stocks and dollar rebound on upbeat data as Treasury yields rise
NEW YORK (Reuters) – US stocks, the dollar and US Treasury yields rose on Wednesday after economic data indicated solid momentum, keeping alive the prospect of a US interest-rate increase in December.
Gasoline futures surged and crude-oil prices fell as flooding and damage from Tropical Storm Harvey shut nearly a quarter of US refinery capacity, curbing demand for crude while raising the risk of fuel shortages.
Gross-domestic-product data on Wednesday showed the US economy grew faster than initially thought in the second quarter, while a separate report showed US private-sector employers added 237,000 jobs in August, the biggest monthly increase in five months.
On Wall Street, stocks gained as the unexpectedly strong US economic-growth data outweighed concerns about escalating tensions between the United States and North Korea.
Investors also awaited President Donald Trump’s first speech specifically on tax reforms, a key contributor to the rally in stocks since his victory in November.
In afternoon trading, the Dow Jones Industrial Average rose 43.75 points, or 0.2%, to 21,909.12, the S&P 500 gained 13.12 points, or 0.54%, to 2,459.42, and the Nasdaq Composite added 67.52 points, or 1.07%, to 6,369.41.
European stocks rose in a relief rally a day after geopolitical concerns caused a sharp dip across equity markets. The pan-European STOXX 600 closed 0.7% higher.
MSCI’s world index, which tracks shares in 46 countries, was up 0.2%.
In the bond market, benchmark 10-year US Treasury notes were down 3/32 in price to yield 2.15%, up from 2.14% on Tuesday.
Concerns about rising tensions with North Korea and risks surrounding the US government’s need to raise the debt ceiling next month remained forefront in investors’ minds.
The dollar, which rose on speculation that the European Central Bank could step in to weaken the euro, also was helped by the strong data. The euro was 0.63% lower to $1.1897, on pace for its worst day in more than three weeks.
The ECB is set to hold a policy meeting next week.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.65% higher at 92.852.
With Tropical Storm Harvey shutting over a fifth of US refineries, US gasoline futures were up 4.4% at $1.8624 a gallon, having hit $1.9231, the highest since July 2015.
Brent oil, the international benchmark for crude trading, was down $1.08 to $50.92 a barrel. US crude was down 38 cents to $46.06.
Gold steadied as the stronger dollar pushed bullion off Tuesday’s nine-month high. But it remained firmly above $1,300 an ounce on renewed tensions between Washington and North Korea.