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U.S. Treasury yields slip after rally
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Seagen surges on Pfizer-buyout report
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Union Pacific jumps as CEO to step down
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Indexes up: Dow 0.12%, S&P 0.34%, Nasdaq 0.67%
(Adds comment, updates prices)
By Sruthi Shankar
Feb 27 (Reuters) - U.S. stocks rose on Monday as
investors hunted for bargains after the main benchmarks logged
their biggest percentage declines of the year on worries about
the impact of a tighter monetary policy.
The blue-chip Dow erased its gains for the year in
Friday's selloff and the benchmark S&P 500 posted its
third straight week of losses on fears that a strong economy and
high inflation will give the Fed more room to raise rates.
The three main indexes climbed about 1% after the opening
bell on Monday but gave up some gains by afternoon as defensive
sectors such as utilities and consumer staples stocks fell.
Growth stocks rebounded, with Tesla up 4.1% after
the electric automaker said its plant in Brandenburg near Berlin
was producing 4,000 cars a week, three weeks ahead of schedule
according to a recent production plan reviewed by Reuters.
"Some relatively significant losses last week is the
starting point," said Art Hogan, chief market strategist at B
Riley Wealth.
"Also, when you look at the drivers last week,
better-than-expected economic data pushed yields higher. As we
enter the new week, we see that the yields are calming down a
bit."
The yield on two-year Treasury notes , the most
sensitive to short-term rate expectations, slipped after
touching a near four-month high earlier. Traders raised their bets of a 50-basis-point (bps) hike in
March after data last week showed the Personal Consumption
Expenditures price index, the metric by which the Fed measures
its 2% inflation target, rose 5.4% last month.
Fed fund futures show traders are pricing in a third 25 bps
hikes this year and see rates peaking at 5.4% by September. Morgan Stanley said it expects the Fed to cut rates by March
2024, farther from its previous forecast of December 2023,
saying it now expects "a slower pace" of rate cuts.
Meanwhile, Fed Governor Philip Jefferson said he had "no
illusion" that inflation would quickly fall back to target and
was committed to keeping restrictive monetary policy in place
for as long as needed to make sure price stability is restored.
At 12:11 p.m. ET, the Dow Jones Industrial Average was up 39.05 points, or 0.12%, at 32,855.97, the S&P 500 was up 13.31 points, or 0.34%, at 3,983.35, and the Nasdaq
Composite was up 76.52 points, or 0.67%, at 11,471.46.
Data earlier showed new orders for key U.S.-made capital
goods increased more than expected in January while shipments of
the so-called core goods rebounded, suggesting that business
spending on equipment picked up at the start of the first
quarter.
Seagen Inc surged 10.5% after the Wall Street
Journal reported that Pfizer was in early talks to
acquire the biotech firm. Pfizer's shares slipped 1.1%.
U.S. railroad operator Union Pacific jumped 9.5% as
Chief Executive Lance Fritz said he would step down, a move that
follows calls from hedge fund Soroban Capital Partners for his
ouster.
Fisker Inc soared 29% after the EV maker reported
increased orders for its sports utility vehicle Ocean and
maintained its production forecast for the year.
Advancing issues outnumbered decliners by a 2.33-to-1 ratio
on the NYSE and 1.75-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and three new
lows, while the Nasdaq recorded 51 new highs and 64 new lows.
(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru;
Editing by Saumyadeb Chakrabarty and Arun Koyyur)
