US stocks extend rally, Treasury yields fall after strong earnings and economic data

NEW YORK, Oct 18 (Reuters) – Wall Street stocks closed higher and Treasury yields fell on Tuesday as upbeat earnings and better-than-expected factory data fueled a risky rally.

Building on Monday’s broad gains, the S&P 500 led major US equity indices higher to end the session up nearly 1% or more, with sectors up across the board.

Meanwhile, yields on benchmark Treasuries were last lower, after hovering throughout the day.

“The market was a bit oversold heading into Monday, and people were worried about what was going to happen over the weekend. People went into the week feeling a bit better,” said Robert Pavlik, manager of main portfolio at Dakota Wealth in Fairfield, Conn. “You get a combination of short coverage and fear of missing out.”

Better than expected quarterly results from Goldman Sachs Group Inc (GS.N), Johnson & Johnson (JNJ.N) and Lockheed Martin (LMT.N) set the tone, with robust industrial production data showing signs of strength economy as central banks tighten monetary policy to fight inflation.

The belief that “a recession is coming and the Fed is going to raise interest rates, with the expectation that maybe a pause will happen something next year,” is now entrenched in the market, said Pavlik. “Without all that weight, the market may go higher after being sold.”

The Dow Jones Industrial Average (.DJI) rose 337.98 points, or 1.12%, to 30,523.8, the S&P 500 (.SPX) gained 42.04 points, or 1.14%, to 3,719.99 and the Nasdaq Composite (.IXIC) added 96.60 points, or 0.9%, to 10,772.40.

Monday’s policy reversal by UK Finance Minister Jeremy Hunt continued to support investor sentiment.

European stocks extended their political U-turn rally – with help from the tech sector – to close slightly higher on the day.

The pan-European STOXX 600 index (.STOXX) rose 0.34% and the MSCI gauge of stocks across the world (.MIWD00000PUS) gained 1.13%.

Emerging market stocks rose 1.50%. MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) closed up 1.55%, while the Japanese Nikkei (.N225) rose 1.42%.

Treasury yields hovered throughout the session, but had fallen slightly by the closing bell.

The yield on the benchmark 10-year note was last at 3.9922%, down from 4.015% on Monday night.

The 30-year bond last rose 1/32 to 4.0142%, down from 4.015% Monday night.

The pound fell after jumping almost 2% on Monday, which supported the greenback against a basket of global currencies, but the dollar remained essentially flat for the last time, its gains subdued by sentiment. risky investors.

The dollar index rose 0.02%, with the euro up 0.17% at $0.9855.

The Japanese yen weakened 0.12% against the greenback at 149.22 to the dollar, while the pound last traded at $1.1327, down 0.23% on the day.

Crude prices fell on fears of rising US inventories and signs of declining global demand.

U.S. crude slid 3.09% to settle at $82.82 a barrel, while Brent crude stood at $90.03 a barrel, down 1.74% on the day.

The flat dollar helped support gold’s nominal gain.

Spot gold added 0.1% to $1,650.94 an ounce.

Reporting by Stephen Culp; additional reporting by Elizabeth Howcroft in London; Editing by Alison Williams, Will Dunham and Deepa Babington

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