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China's 5% growth target drag on ADRs, commodity shares
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Apple rises as Goldman begins coverage with 'buy'
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Crypto stocks fall as Silvergate suspends payments network
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Factory orders fall in January
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Indexes up: Dow 0.14%, S&P 0.26%, Nasdaq 0.27%
(Updates prices, adds commentary, byline)
By Sinéad Carew and Bansari Mayur Kamdar
March 6 (Reuters) -
Wall Street's major indexes pared early gains on Monday and U.S. Treasury yields rose as investors braced for this week's testimony from Federal Reserve Chair Jerome Powell and economic data including the jobs report. Shares of iPhone maker Apple Inc , last up 2%, were the biggest boost for the S&P 500 index after Goldman Sachs initiated coverage with a "buy" rating. But equities lost earlier gains as yields on U.S. 10-year Treasury notes rebounded from an early decline after data showed new orders for U.S.-manufactured goods fell less than expected in January. Higher orders for machinery and a range of other products pointed to manufacturing regaining its footing, although civilian aircraft bookings fell. 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.
Monday's data likely 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."
The Dow Jones Industrial Average rose 45.24 points, or 0.14%, to 33,436.21; the S&P 500 gained 10.67 points, or 0.26%, at 4,056.31; and the Nasdaq Composite added 31.23 points, or 0.27%, at 11,720.23.
Six of 11 major S&P 500 sectors rose. But the
commodity-linked materials sector led decliners after
China set a lower-than-expected target for economic growth this
year at around 5%.
The technology sector was the top gainer, with the
biggest boost from Apple followed by Microsoft Corp and
Google parent Alphabet Inc .
The three main U.S. stock indexes had rallied on Friday and
notched weekly gains after comments from Fed policymakers calmed
jitters around aggressive rate hikes.
But San Francisco Federal Reserve Bank President Mary Daly
said on Saturday that if inflation and labor market data
continue to come in hotter than expected, interest rates would
need to go higher and stay there longer than Fed policymakers
had projected in December.
Investors will look for clues about the Fed's future rate
hiking path when Powell testifies before Congress on Tuesday and
Wednesday. Since Powell last spoke strong economic data and
hotter than expected inflation have raised concerns the Fed will
raise rates higher than expected or keep them higher for longer.
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. Shares of cryptocurrency-related companies fell after
Silvergate Capital Corp pulled the plug on its crypto
payments network, raising doubts about the company's ability to
stay in business. The California-based bank, which was last up
1% at $5.84, had fallen as low as $5.11. Its cryto peer
Signature Bank was down almost 2%.
Declining issues outnumbered advancers on the NYSE by a
1.46-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored decliners.
The S&P 500 posted 20 new 52-week highs and one new low; the
Nasdaq Composite recorded 74 new highs and 71 new lows.
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Correlation between S&P 500 and 2-year Treasury bond yields ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Sinéad Carew, Sruthi Shankar, Bansari Mayur
Kamdar and Shristi Achar A in Bengaluru; Editing by Vinay
Dwivedi, Anil D'Silva and Richard Chang)
