By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks climbed for a third
session and U.S. Treasury yields fell on Monday as investors
considered the impact of a downbeat economic report on U.S.
monetary policy.
The Dow Jones Industrial Average (DJI) added 25.77 points, or
0.2%, to 15,036.28. The S&P 500 index (SPX) rose 3.9 points, or
0.3%, to 1,667.40, with health care faring best and consumer
staples the worst performing of its 10 major sectors. The Nasdaq
Composite (RIXF) gained 21.92 points, or 0.6%, to 3,679.70.
Treasury prices rose, with the yield on the 10-year note
(10_YEAR) falling 2 basis points to 2.799%.
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.
Investors are looking at 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.
"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.
"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.
For every two stocks falling, three gained on the New York Stock
Exchange, where 190 million shares traded as of 12:30 p.m. Eastern.
Composite volume topped 1 billion.
Biotechnology-firm Amgen Inc. (AMGN) rallied 8.8% 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%.
The dollar (DXY) gained against the currencies of U.S. trading
partners, including the euro (EURUSD) .
Gold futures for December delivery (GCZ3) wavered, and were
lately off $2.70, or 0.2%, at $1,393.10 an ounce. The price of oil
fell, with crude futures for October delivery (CLV3) off 55 cents,
or 0.5%, at $105.87 a barrel.
Up nearly 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 1.1% in August but up almost 17% for the year and the
latter up 1.5% for the month and 22% year-to-date.
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