(Adds close of U.S. markets)
* Powell comments ease bond-yield angst
* Late-day rally lifts Dow, S&P 500 into black
* Crude oil, metal prices rise on growth outlook
* Expectations of faster growth spur inflation fears
* Global asset performance:http://tmsnrt.rs/2yaDPgn
By Herbert Lash
NEW YORK, Feb 23 (Reuters) - A gauge of global equity
markets rebounded in a late-session rally on Tuesday after U.S.
Federal Reserve Chair Jerome Powell calmed fears of rising
interest rates that have roiled bonds and helped spur assets
linked to expectations of a strong recovery.
Copper, a leading indicator of the economic cycle, touched a
9-1/2 year high before paring early gains, while crude settled
near break-even. But oil edged up as the Dow and S&P 500 rose
into the black and Tesla TSLA.O recouped most steep losses.
Investors have learned to buy the dip when equities drop as
little as 3% to 4%, especially as they've been rewarded for
doing so the past six months and for a decade, said Dennis Dick,
a proprietary trader at Bright Trading LLC.
"It's so hard to get on the bear train," Dick said. "Just
when it starts to get a little ugly, there's so much reward in
buying the dip."
Powell told a U.S. Senate Banking Committee hearing that the
recovery remains "uneven and far from complete," and that it
will be "some time" before the Fed considers changing policies
aimed at achieving full employment. Powell believes monetary policy needs to be supportive and
that there is a long way to go to repair the jobs market and
before inflation becomes a concern, said Michael Arone, chief
investment strategist at State Street Global Advisors in Boston.
"I'm not anticipating any changes to monetary policy any
time soon," Arone said, a view that should ease market concerns
that the Fed could boost rates to tap down inflation.
MSCI's benchmark for global equity markets .MIWD00000PUS
closed up 0.04% at 674.03, while the Dow Jones Industrial
Average .DJI eked out a gain of 0.05% and the S&P 500 .SPX
rose 0.13%.
Tech stocks fell as investors sold recent winners to rotate
into assets that are expected to do well in an improving
economy. The tech-heavy Nasdaq .IXIC dropped 0.5% while in
Europe tech stocks .SX8P posted their worst two-day decline in
four months, falling 3.7%.
The broad FTSEurofirst 300 index .FTEU3 closed down 0.46%
to 1,583.81, but rising borrowing rates lifted bank stocks
.SX7P , with Spain's bank-heavy index .IBEX adding 1.7%.
Gold slid as the dollar rebounded from six-week lows, with
other precious metals also sliding. A 15.2% jump at one point
showed the degree of market angst as reflected in Cboe's market
volatility index .VIX , which shed gains to fall 1.4%.
Tesla shares fell into the red for the year, hit by an 11.4%
plunge in bitcoin BTC=BTSP . Tesla closed down 2.2% at $698.84.
The electric carmaker recently invested $1.5 billion in the
cryptocurrency, which fell as investors grew nervous of its
sky-high valuations. After being knocked off an eight-month high by European
Central Bank chief Christine Lagarde signaling discomfort with
the recent surge in yields, the 10-year Bund yield DE10YT=RR
resumed a recent upward trajectory and was last at -0.314%.
U.S. yields retreated slightly after Powell's comments.
Yields had jumped to 1.394% on Monday, up from less than 1%
at the start of the year, on fears the Fed would crack down on
inflationary pressures by boosting borrowing costs. The 10-year
U.S. Treasury US10YT=RR note fell 1.7 basis points to 1.3517%.
Oil prices jumped by more than $1 at one point, underpinned
by optimism over COVID-19 vaccine rollouts and lower output as
U.S. supplies were slow to return after a deep freeze in Texas
shut in crude production last week. Brent crude futures LCOc1 rose 13 cents to settle at
$65.37 a barrel, while U.S. crude futures CLc1 fell 3 cents to
settle at $61.67 a barrel. Brent and U.S. crude rose in
after-hours trade.
In currency markets, the dollar in early trade briefly
dropped to its lowest since Jan. 13, while commodity-linked
currencies hovered near multi-year highs.
The dollar index =USD rose 0.128%, with the euro EUR=
down 0.1% to $1.2142. The Japanese yen JPY= weakened 0.20%
versus the greenback at 105.25 per dollar.
U.S. gold futures GCv1 settled down 0.1% at $1,805.90 an
ounce.
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World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
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