By Sinéad Carew
NEW YORK (Reuters) – A global index of stocks was advancing in a choppy session on Thursday after falling for nine days straight, as investors fretted about the economic impact of soaring oil prices and U.S. Treasury yields.
While there was some respite from the dollar’s strength in currency markets, 10-year U.S. Treasury yields touched their highest levels since 2007.
futures pulled back as the session wore on after briefly nudging in overnight trading above $95 a barrel for the first time since August 2022. They had added more than 3% on Wednesday after data showed a big drop in U.S. crude stocks, raising concerns about a supply-side energy shock.
Along with worries about oil’s impact on inflation and about the Federal Reserve’s interest rate policy, traders were also watching U.S. lawmakers’ efforts to avoid a government shutdown before a Sept. 30 deadline, according to Paul Christopher, head of global investment strategy, Wells Fargo Investment Institute.
“We’re chopping around. There’s still liquidity out there so people who missed out on the rally the first time are saying maybe I can buy in now. But there’s also people who want to sell because they’re concerned about the economy, the Fed and maybe a 5% 10-Treasury yield,” he said. “The overall mood is nervous.”
Extra volatility could be expected as money managers rebalance their portfolios ahead of the month-end, with Friday being the last trading day of the third quarter, Christopher said.
Investors may also have extra jitters ahead of a key inflation reading due out before market open on Friday. A number of central bankers were also due to make comments on Thursday, including Federal Reserve Chair Jerome Powell at 2000 GMT.
In equities, the rose 141.44 points, or 0.42%, to 33,691.71, the gained 25.01 points, or 0.59%, to 4,299.52 and the added 81.80 points, or 0.62%, to 13,174.65.
The pan-European index rose 0.34% and MSCI’s gauge of stocks across the globe gained 0.42% after spending some time in negative territory earlier in the session.
In foreign exchange markets, the eased from a 10-month high but remained on track for a weekly gain, while investors stayed on guard for potential intervention in the Japanese yen as it holds near 11-month lows against the U.S. currency.
The yen strengthened 0.16% versus the greenback at 149.37 per dollar, still within a whisker of 150-per-dollar level, seen as likely to provoke an official response or intervention.
The dollar index, which measures the greenback against a basket of major currencies, fell 0.488%, with the euro up 0.63% to $1.0566. Sterling was last trading at $1.2203, up 0.57% on the day.
U.S. Treasury prices were mixed with the long end of the curve selling off and pushing yields higher in the wake of a mishmash of data suggesting an economy that remained fairly stable, though showing some signs of slowing down.
Benchmark 10-year notes were up 1.5 basis points to 4.641%, from 4.626% late on Wednesday, while the 30-year bond was last up 2.2 basis points to yield 4.755%, from 4.733%. But the was last was down 2.9 basis points to yield 5.1124%, from 5.141%.
In energy, oil futures eased on growing concerns that key Western economies will maintain high interest rates to tackle stubborn inflation as traders took profits after prices soared to fresh 10-month highs earlier in the session.
U.S. crude recently fell 0.82% to $92.91 per barrel and was at $96.08, down 0.49% on the day.
Gold, was heading for its biggest weekly decline since February as the rise in Treasury yields drives investors out of the precious metal, which pays no yield.
dropped 0.7% to $1,860.96 an ounce. U.S. fell 0.81% to $1,857.20 an ounce.
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