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Apple rises as GS initiates coverage with 'buy' rating
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China ADRs slip after Beijing's modest growth target of 5%
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Crypto stocks fall as Silvergate suspends payments network
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Indexes up: Dow 0.18%, S&P 0.24%, Nasdaq 0.28%
(Updates prices to open)
By Sruthi Shankar and Bansari Mayur Kamdar
March 6 (Reuters) - U.S. stock indexes rose on Monday as
Treasury yields pulled back further ahead of Federal Reserve
Chair Jerome Powell's testimony and jobs data this week that
could offer fresh cues on the trajectory of interest rates.
Rate-sensitive megacap stocks including Apple Inc ,
Microsoft Corp and Meta Platforms were the top
boosts to the S&P 500 and the Nasdaq as the yield on U.S.
10-year Treasury notes slipped to its lowest since
March 1 at 3.91%.
The two-year yield inched down to 4.85% after
touching its highest since 2007 last week. 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 three main U.S. stock indexes rallied on Friday and
notched weekly gains as yields pulled back from their peaks
after comments from Fed policymakers calmed jitters around
aggressive rate hikes.
Powell will testify before Congress on Tuesday and Wednesday
and investors will watch for clues on the policy outlook, after
recent strong economic data and hot inflation numbers fueled
bets that the central bank could raise interest rates to a
higher-than-expected level.
"Investors are bracing for Powell's comments tomorrow and I
don't think he's going to say very much from what he has been
saying all along. The Fed has been basically setting the stage
for further rate hikes, perhaps beyond May and the market is
well aware of that," said Peter Cardillo, chief market economist
at Spartan Capital Securities in New York.
Traders expect at least three more 25-basis-point hikes this
year and see interest rates peaking at 5.44% by September from
4.67% now. U.S. stocks have turned quite volatile in recent weeks after
a strong performance at the start of this year as investors
factor in the possibility of rates remaining higher for longer.
The benchmark S&P 500 is up 5.4% so far this year after a
19.4% plunge in 2022.
Investors are awaiting factory orders data for January, due at 10:00 a.m. ET, to assess the impact of higher rates on the manufacturing sector.
At 9:48 a.m. ET, the Dow Jones Industrial Average was up 58.51 points, or 0.18%, at 33,449.48, the S&P 500 was up 9.61 points, or 0.24%, at 4,055.25, and the Nasdaq Composite was up 32.73 points, or 0.28%, at 11,721.74. Shares of Apple climbed 1.9% after Goldman Sachs initiated coverage on the iPhone maker with a "buy" rating. U.S.-listed shares of Chinese companies Alibaba and PDD Holdings slipped 0.9% and 2.7%, respectively, after China set a modest annual economic growth target of about 5%, below market expectations of 5.5%-plus growth. Shares of cryptocurrency-related companies fell after Silvergate Capital Corp pulled the plug on its crypto payments network, after raising doubts on the company's ability to stay in business. The California-based bank slid 10.4%, while peer Signature Bank declined 1.7%. Advancing issues outnumbered decliners by a 1.06-to-1 ratio on the NYSE, while decliners outnumbered advancers for a 1.17-to-1 ratio on the Nasdaq. The S&P index recorded 14 new 52-week highs and no new low, while the Nasdaq recorded 55 new highs and 22 new lows. (Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru Editing by Vinay Dwivedi)
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