NEW YORK: Wall Street closed higher on Monday as investors appeared less concerned about possible retaliation for US-led missile strikes on Syria, and the yield curve reached its flattest level in over a decade.
Saturday’s strikes were the biggest intervention by Western countries against Syrian President Bashar al-Assad, whose ally Russia is facing further US economic sanctions over its role in the conflict.
“The catalyst had been the concern about trade issues, which is calming down. The bombing in Syria looks to be an event rather than an ongoing thing and it was a coalition,” said Jeffrey Carbone, managing partner, Cornerstone Wealth, in Huntersville, North Carolina.
“Now we get to concentrate on fundamentals,” he said, adding that earnings season is beginning as economic data has shown an accelerating economy.
President Donald Trump said on Monday that he will nominate economist Richard Clarida as Federal Reserve Vice Chairman, adding another hawkish voice at the central bank.
The news flattened the spread between five- and 30-year Treasury bonds to 34.6 basis points, the lowest in over 10 years.
Expectations of further interest rate increases lifted the short end of the curve earlier in the day, led by the two-year government bond, which hit 2.394, its highest since September 2008.
The Dow Jones Industrial Average rose 212.9 points, or 0.87 per cent, to 24,573.04, the S&P 500 gained 21.54 points, or 0.81 per cent, to 2,677.84 and the Nasdaq Composite added 49.64 points, or 0.7 per cent, to 7,156.29.
Hopes that the strike against Syria would not escalate also spurred investors to shed the US dollar.
The greenback fell 0.41 per cent against a basket of major currencies, while the euro rose 0.4 per cent to $1.2378.
European shares eased, adding to a mixed picture from lower Asian stock markets and suggesting that a degree of caution remains.
The pan-European FTSEurofirst 300 index lost 0.46 per cent. MSCI’s gauge of stocks across the globe , which tracks shares in 47 countries, gained 0.39 per cent, though emerging market stocks dipped 0.58 per cent.
The yields on German and 10-year US government bonds, among the most liquid and safe assets in the world, touched their highest levels in nearly two weeks and four weeks, respectively.
That was partly as attention turned to what is expected to be a robust first-quarter US corporate earnings season, which begins in earnest this week.
Some other traditional safe-haven bets held firmer, with gold and Japan’s yen edging higher.
Dealers were keeping a wary eye on Japanese politics after a survey showed support for Prime Minister Shinzo Abe had fallen to 26.7 per cent, the lowest since he took office in 2012.
Meanwhile, oil prices fell on waning investor concern about Syria. US crude fell 1.62 per cent to $66.30 per barrel and Brent was last at $71.49, down 1.5 per cent on the day.US stocks rise as Syria fears ease; yield curve flattens
Source: Economic Times