Intel stock spikes after report of possible US government stake
* CPI data shows underlying inflation muted
* Market still wary of bond yields ahead of auctions
* Wall Street builds on Tuesday rally
(Updates to open of U.S. markets, changes byline, dateline;
previous LONDON)
By Chuck Mikolajczak
NEW YORK, March 10 (Reuters) - A gauge of global stocks
climbed for a second straight day on Wednesday to hit its
highest level in a week, after a report on U.S. consumer prices
indicated calmed recent concerns about inflation, while the
dollar retreated further from a 3-1/2 month high.
Economic data from the Labor Department said its consumer
price index rose 0.4% in February, in-line with expectations,
after a 0.3% increase in January. Core CPI, which excludes the
volatile food and energy components, edged up 0.1%, just shy of
the 0.2% estimate, after being unchanged the prior two months.
"We will see what happens in terms of when inflation begins
to pick up over the next couple of years, but the market seemed
to like it OK today," said Ellen Hazen, portfolio manager at
F.L.Putnam Investment Management in Wellesley, Massachusetts.
While analysts largely expect a pickup in inflation as
vaccine rollouts have led to a reopening of the economy, worries
persist that additional stimulus in the form of a $1.9 trillion
coronavirus relief package set to be signed by U.S. President
Joe Biden could lead to an overheating of the economy and
uncontrolled inflation.
"There are a lot of reasons why inflation could pick up over
the next two to three years and the market is correct to be
concerned about that, it might have gotten a little bit overly
focused on it in the last couple of weeks," said Hazen.
"But in general, the market is correct to be on alert for
signs of rising inflation, particularly because of the stimulus
and the size of the Fed balance sheet."
The House of Representatives moved toward final approval of
Biden's $1.9 trillion COVID-19 relief bill on Wednesday, which
forecasters predict will turbocharge the U.S. economy.
The data was enough to puncture recent concerns about
rapidly rising inflation and provide support for stocks on Wall
Street, which built on Tuesday's strong rally.
The Dow Jones Industrial Average .DJI rose 332.58 points,
or 1.04%, to 32,165.32, the S&P 500 .SPX gained 23.83 points,
or 0.61%, to 3,899.27 and the Nasdaq Composite .IXIC added
58.07 points, or 0.44%, to 13,131.89.
The yield on the benchmark 10-year note retreated in the
wake of the data, before edging higher on the session and taking
some of the early steam out of equity gains.
Investors will now eye auctions of 10-year and 30-year debt
on Wednesday and Thursday, with investors seeking to cover
massive shorts on both maturities. A weak 7-year auction in late
February helped fuel inflation concerns and sent yields higher.
Benchmark 10-year notes US10YT=RR last yielded 1.5438%,
from 1.544% late on Tuesday.
The dollar also moved lower for a second day following the
data before reversing course.
The dollar index =USD rose 0.022%, with the euro EUR=
down 0.04% to $1.1893.
Oil prices resumed their climb after two days of declines,
extending gains after the Energy Information Administration
reported a bigger-than-expected storage build. U.S. crude CLc1 recently rose 0.45% to $64.30 per barrel
and Brent LCOc1 was at $67.82, up 0.44% on the day.
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Global assets in 2021 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar YTD http://tmsnrt.rs/2egbfVh
Emerging markets in 2021 http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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