NEW YORK: Wall Street stocks traded slightly higher on Monday (March 6), ahead of key jobs data and congressional testimony from Federal Reserve chair Jerome Powell.
The Dow Jones Industrial Average rose 40.47 points, or 0.12%, to 33,431.44; the S&P 500 gained 2.78 points, or 0.07%, at 4,048.42; and the Nasdaq Composite dropped 13.27 points, or 0.11%, to 11,675.74.
Earlier in the session the indices looked much stronger with the Nasdaq gaining more than 1% before closing lower. The biggest boost had come from iPhone maker Apple Inc after Goldman Sachs initiated coverage with a “buy” rating.
But equities gave up earlier gains as yields on US 10-year Treasury notes and the two-year Treasuries yield came back from early declines after data showed new orders for US-manufactured goods fell less than expected in January.
Rising bond yields tend to weigh on equity valuations, particularly those of growth and technology stocks, as higher rates reduce the value of future cash flows.
The movements come as Powell is set for two days of testimony before Congress, on Tuesday and Wednesday, where he will be pressed about the central bank's efforts to counter inflation.
This would provide hints on what policymakers are thinking about price pressures, influencing the market's movements.
“I really think it’s just position-squaring ahead of Powell’s testimony,” said Karl Haeling of LBBW.
But much of the key data that will inform the Fed'’s next meeting will come after the hearings, including Friday’s government jobs report for February.
“This week will likely deliver a make-or-break moment for risk appetite as we will hear Fed chair Powell’s testimony to Congress and find out if the hot January jobs report was an aberration,“ said Edward Moya of trading platform Oanda.
“Stocks probably won’t be able to have a meaningful rally until we hear from Powell,” he added in a note.
And with potential Fed rate hikes their key concern, Monday's data had already dampened investor enthusiasm, said Shawn Cruz, head trading strategist at TD Ameritrade in Chicago.
“The market pullback was because there is still a lot of work to do on inflation,“ said Cruz. “We’re not seeing the type of demand slowdown we need to see. The whole point of the Fed hiking rates is to slow down the economy.” – AFP, Reuters