Stocks gain as Wall Street rallies, US yields slip
Updated at 4:15 p.m. ET/ 2015 GMT
China's stimulus details disappoint, impacting global stocks
U.S. inflation data and corporate earnings in focus
U.S. Treasury yields rise on recalibrated Fed expectations
By Chuck Mikolajczak
NEW YORK, Oct 8 (Reuters) -A gauge of global stocks advanced on Tuesday after a rally on Wall Street overshadowed disappointment over the lack of details in China's stimulus, as investor focus shifts to upcoming U.S. inflation data and corporate earnings.
On Wall Street, U.S. stocks closed sharply higher as the benchmark S&P 500 bounced back from a drop of nearly 1% a day earlier, with a jump of more than 2% in technology .SPLRCT stocks providing key support.
Stocks had stumbled on Monday on increasing concerns about a wider conflict in the Middle East and as last week's solid U.S. payrolls report caused a reassessment on the size and pace of interest rate cuts from the Federal Reserve.
Investors are also eyeing Thursday's inflation reading with the release of the latest consumer price index (CPI), while banks are scheduled to kick off the corporate earnings season at the end of the week.
"The Fed keeps telling you that they're data-dependent - so the end of this week is big to see whether or not inflation is truly tamed," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. "But the Fed has been signaling where - not necessarily when - rates are going, and they have signaled that they're going lower."
The Dow Jones Industrial Average .DJI rose 126.13 points, or 0.30%, to 42,080.37, the S&P 500 .SPX rose 55.19 points, or 0.97%, to 5,751.13 and the Nasdaq Composite .IXIC rose 259.01 points, or 1.45%, to 18,182.92.
European shares closed lower, as a lack of details on China's long-awaited fiscal stimulus weighed on sectors related to the world's second-largest economy, such as mining and luxury goods.
MSCI's gauge of stocks across the globe .MIWD00000PUS advanced 1.24 points, or 0.15%, to 844.96. The STOXX 600 .STOXX index ended 0.55% lower.
Hong Kong's Hang Seng Index .HSI plunged 9.4%, its biggest drop since 2008, erasing some of the big gains made during a Chinese holiday, after government economic planner Zheng Shanjie told reporters that China is "fully confident" of achieving economic targets for 2024 and would pull forward 200 billion yuan ($28.36 billion) from next year's budget to spend on investment projects and support local governments.
But a failure to sufficiently detail new or large measures sparked concerns about China's commitment to pull the economy out of its current slump.
The Shanghai Composite .SSEC and blue-chip CSI300 .CSI300, both of which were closed during the holiday, ended 4.6% and 5.9% higher, respectively, paring earlier gains of more than 10%.
U.S. Treasury yields were slightly lower in choppy trading on factors such as Federal Reserve monetary policy, investor positioning, and economic outlooks affected market moves.
Expectations for a 25-basis-point rate cut from the Fed at its November meeting stand at 87.3%, according to CME's FedWatch Tool, with the market pricing in a 12.7% chance of the Fed's holding rates steady. Last week the market was fully pricing in a cut of at least 25 basis points with a 36.8% chance for another outsized 50 basis point cut.
The yield on benchmark U.S. 10-year notes US10YT=RR dipped 0.6 basis point to 4.02%.
Oil prices dropped, following a recent rally sparked by rising hostilities in the Middle East, as fears eased of supply interruptions from the conflict between Israel and Iran and a massive Gulf of Mexico hurricane.
U.S. crude CLc1 settled down 4.63% to $73.57 a barrel, and Brent LCOc1 tumbled to settle at $77.18 per barrel, also down 4.63%.
Prime Minister Benjamin Netanyahu said Israeli airstrikes had killed two successors to Hezbollah's slain leader, as Israel expanded its offensive against the Iran-backed group. The comments were released hours after the deputy leader of Hezbollah left the door open to a negotiated ceasefire.
The dollar index =USD, which measures the greenback against a basket of currencies, was unchanged at 102.48, with the euro EUR= up 0.04% at $1.0978.
Against the Japanese yen JPY=, the dollar strengthened 0.07% to 148.29. Sterling GBP= strengthened 0.13% to $1.31.
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
World FX rates YTD http://tmsnrt.rs/2egbfVh
Reporting by Chuck Mikolajczak; additional reporting by Lisa Mattackal and Pranav Kashyap in Bengaluru, Gertrude Chavez-Dreyfuss and David French in New York; Editing by Nick Zieminski, Will Dunham and Leslie Adler
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
