By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks climbed and U.S. Treasury
yields fell on Monday as investors considered the impact of a
downbeat economic report on U.S. monetary policy.
Orders for U.S. durable goods fell more than expected last
month, down 7.3% in the largest drop in nearly a year. The decline
in bookings for goods intended to last at least three years is the
biggest drop since August 2012 after a 3.9% rise in June, the
Commerce Department said.The Dow Jones Industrial Average (DJI)
added 23.32 points, or 0.2%, to 15,033.83.
Treasury prices rose, with the yield on the 10-year note
(10_YEAR) falling 2 basis points to 2.798%.
"The August market-correction has been driven by tapering fear
and higher interest rates. It appears to us that tapering is now
almost fully discounted, while Treasury yields may have reached a
ceiling," noted William Riegel, head of equity investment, and Lisa
Black, head of global public fixed-income markets, at TIAA-CREF, in
emailed commentary.
"The yield on the 10-year Treasury note rose to a two-year high,
as markets worry tapering could be announced as early as September
at the next FOMC meeting," said Bill Stone, chief market strategist
at PNC Asset Management Group.
The S&P 500 index (SPX) rose 4.73 points, or 0.3%, to
1,668.23, with materials and health care faring best and
telecommunications and consumer staples performing the worst among
its 10 major sectors.
The Nasdaq Composite (RIXF) gained 20.72 points, or 0.6%, to
3,678.51.
For every five stocks falling, nine gained on the New York Stock
Exchange, where 111 million shares traded as of 11:15 a.m. Eastern.
Composite volume topped 725 million.
Biotechnology-firm Amgen Inc. (AMGN) rallied 8.6% a day after
the drug maker agreed to buy Onyx Pharmaceuticals Inc. (ONXX) for
about $10.4 billion to gain access to its three cancer drugs.
Shares of Onyx Pharmaceuticals were up 5.7%.
Investors look to reports on the economy with a
less-than-straight-forward view, given improvement is likely to
bring on reduced monetary easing by the Federal Reserve sooner
rather than later.
The central bank is expected to begin cutting its $85 billion in
monthly bond purchases before the end of the year, with the market
currently debating whether the move would begin in September or
December.
"Despite the hopes of some, the minutes from the July Federal
Open Market Committee meeting gave no clear indication as to when,
beyond 'later this year,' the Fed will commence tapering asset
purchases," offered Stone at PNC.
The dollar (DXY) edged higher against the currencies of U.S.
trading partners, including the euro (EURUSD) .
Gold futures for December delivery (GCZ3) wavered, and were
lately up $2.30, or 0.2%, at $1,398.10 an ounce. The price of oil
fell, with crude futures for October delivery (CLV3) off 30 cents,
or 0.3%, at $106.12 a barrel.
Up 15% on the year and down 3% in August, the Dow industrials on
Friday marked a third consecutive weekly drop, the longest weekly
losing streak since mid-November 2012. Both the S&P 500 and
Nasdaq Composite gained for the week, with the former off 1% in
August but up 17% for the year and the latter up 1.5% for the month
and 22% year-to-date.
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