U.S. stocks edge up after Fed minutes, bonds steady, dollar firm

  • 7/7/2021
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NEW YORK (Reuters) -U.S. Treasuries prices maintained gains on Wednesday, holding down yields, and two stock indexes notched record highs after minutes from the Federal Reserve’s latest meeting largely confirmed market expectations. The dollar remained firm. At a mid-June meeting, Fed officials said substantial further progress on economic recovery “was generally seen as not having yet been met,” although participants expected progress to continue, according to the minutes. “Various participants” at the session still felt conditions for curbing the bond-buying that is supplying markets with cash would be “met somewhat earlier than they had anticipated,” while others saw a less clear signal from incoming data, said the minutes. “It looks like they’re setting the market up for an announcement on cutting back from this bond buying some time toward the end of the third quarter or early fourth quarter,” said Andrew Richman, senior fixed income strategist at Sterling Capital Management in Jupiter, Florida. Stock prices and bond yields had wobbled earlier, reflecting fears that the U.S. economic recovery may be slowing, and of the spread of COVID-19 variants. Those factors clouded the view that rates may rise soon to curb inflation, though many investors in any case believe the current inflation signs are temporary. Bond prices rose during the session, pushing yields lower. At 5:15 p.m. EDT (2115 GMT), the yield on 10-year Treasury notes was down 4.7 basis points to 1.323%. During the session the yield dipped as low as 1.2960%. U.S. stock prices bounced off session lows to post slight gains for the day, with the S&P 500 and tech-laden Nasdaq closing at record highs. The Dow Jones Industrial Average rose 104.42 points, or 0.3 percent, to 34,681.79. The broad S&P 500 gained 14.59 points, or 0.34 percent, to 4,358.13. The Nasdaq Composite added 1.42 points, or 0.01 percent, to 14,665.06. “There’s a sense with recent economic data that even if there are some Fed members likely to look towards tapering (asset purchases), the overall policy will stay very loose and uninterrupted because we are not seeing anything indicative of ‘too hot’,” said Juan Perez, senior FX strategist at Tempus Inc in Washington. The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.174 points or 0.19 percent, to 92.72. Oil prices continued their recent decline. Brent crude was last down $1.13, or down 1.52 percent, at $73.40 a barrel. U.S. crude was last down $1.24, or down 1.69 percent, at $72.13 per barrel. Gold extended gains to a sixth session, helped by the lower Treasury yields. Spot gold prices rose $6.7202 or 0.37 percent, to $1,803.41 an ounce.[GOL/] Reporting by Alwyn Scott; Additional reporting by Carolyn Cohn in London and Wayne Cole in Sydney; Editing by Kirsten Donovan, David Gregorio and Richard Pullin Our Standards: The Thomson Reuters Trust Principles.

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