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US stocks rise, helped by steady bond yields and Powell remarks

Stocks rose overnight on Wall Street, helped again by large technology companies that have benefited from steady bond yields.

Investor confidence was boosted after Federal Reserve chairman Jerome Powell said the US central bank has the tools to curb higher inflation, which is expected to be temporary. Treasuries advanced, while the US dollar fell.

The S&P 500 closed 0.4 per cent higher. The benchmark index was on track for its third all-time high this week. Technology stocks led the market higher, with some help from companies that rely on consumer spending. The gains were tempered by a slide in banks and energy companies. The Dow Jones Industrial Average rose 57 points, or 0.2 per cent, to 33,503.57 and the Nasdaq gained 1 per cent.

The US sharemarket has benefited this week from a cooling off in the bond market.

The US sharemarket has benefited this week from a cooling off in the bond market. Credit:AP

The easing of bond yields was taking some pressure off technology stocks, which have slipped over the last few months as yields jumped and made the shares look pricey. The sector has also seen choppy trading as investors shift more money into companies that stand to benefit from the economic recovery.

Bond yields, which had been steadily ticking higher, have retreated from highs hit earlier in the month. The yield on the 10-year US Treasury note fell to 1.64 per cent from 1.65 per cent late Wednesday. It had been as high as 1.75 per cent on Monday.

Tech stocks were the biggest benefactors, with Apple and Microsoft shares up more than 1 per cent. Amazon also rose roughly 1 per cent.

Investors are showing cautious optimism about the economic recovery, especially in the US, where vaccine distribution has been ramping up and President Joe Biden has advanced the deadline for states to make doses available to all adults to April 19.

But it’s clear the world’s largest economy has much to do when it comes to recovery. The number of Americans who filed for unemployment benefits last week unexpectedly rose again last week, as many businesses remain closed or partially shut down due to the pandemic, the latest US jobless claims report showed.

Much of the economy is recovering, but employment needs to pick up in order for a full recovery to occur, analysts say. The market will likely continue to be choppy as investors shift money to some of the sectors and companies hardest hit by the pandemic. They are also weighing signs of economic growth against the lingering threat of COVID-19.

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