Wall Street rides Friday’s jobs wave, bonds fret over Fed

By Stephen Culp

© Reuters/Brendan McDermid
FILE PHOTO: New York Stock Exchange opens during COVID-19

NEW YORK (Reuters) – U.S. stocks set a course for new record highs on Monday as blow-out economic data increased investor risk appetite while putting bonds under pressure on worries the Federal Reserve could start raising interest rates sooner than expected.

Friday’s payrolls data, which showed 916,000 job added in March and the unemployment rate falling to 6%, driven by vaccine deployment and stimulus, marked the beginning of what could be the strongest yearly economic performance in decades.

Further evidence of economic revival was provided by the Institute for Supply Management’s non-manufacturing PMI report, which hit a record high.

“Friday’s employment number as well as today’s Non-manufacturing ISM data indicate growing economic strength, which raises concern about the Fed having to taper or increase interest rates,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

The Dow Jones Industrial Average rose 384.05 points, or 1.16%, to 33,537.26, the S&P 500 gained 53.2 points, or 1.32%, to 4,073.07 and the Nasdaq Composite added 176.06 points, or 1.31%, to 13,656.17.

European and Australian stock markets were closed in observance of Easter Monday, while China’s stock market was dark in observance of Tomb Sweeping day.

MSCI’s gauge of stocks across the globe gained 0.90%.

Emerging market stocks rose 0.02%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.01% lower, while Japan’s Nikkei rose 0.79%.

U.S. Treasury yields were mostly higher in choppy trading, lifted by continued optimism about U.S. economic prospects following Friday’s blockbuster nonfarm payrolls report.

Benchmark 10-year notes last fell 1/32 in price to yield 1.727%, from 1.72% late on Friday.

The 30-year bond last fell 14/32 in price to yield 2.387%, from 2.37% late on Friday.

The dollar dipped to one-week lows against a basket of currencies as U.S. stocks rallied and as investors waited on the next catalyst to drive direction.

The dollar index fell 0.45%, with the euro up 0.35% to $1.1803.

The Japanese yen strengthened 0.58% versus the greenback at 110.10 per dollar, while Sterling was last trading at $1.3896, up 0.48% on the day.

Oil prices fell as increasing OPEC+ supply and rising Iranian output offset hopes for a demand rebound driven by economic revival.

U.S. crude fell 3.04% to $59.58 per barrel and Brent was last at $63.07, down 2.76% on the day.

Gold prices edged lower as the safe-haven metal’s luster was dimmed by rising global equity prices.

dropped 0.2Spot gold slipped % to $1,728.57 an ounce.

(Reporting by Stephen Culp; additional reporting by Hideyuki Sano and Gertrude Chavez; Editing by Dan Grebler)