U.S. Stocks Snap Two-Day Slide; Treasuries Drop: Markets Wrap

(Bloomberg) -- U.S. stocks rose to a record with a late-session advance, while Treasuries slipped as a decline in jobless claims signaled a modest firming of the labor market.

The S&P 500 Index halted a two-day decline. Gains for tech shares lifted the Nasdaq 100 to a bigger advance. Ten-year Treasury yields rose to about 1.15%. In Europe, the Stoxx 600 Index was buoyed by strong results from Royal Mail Plc and Credit Agricole SA.

Applications for U.S. state unemployment benefits fell slightly last week in a sign that the labor market is still gradually improving as the vaccine rollout continues and business restrictions ease. After a sharp run-up in equities at the start of February, U.S. stocks have taken a pause as investors weighed the implications of the latest inflation data.

In the background, there’s still a debate over whether more U.S. stimulus, the vaccine distribution and the government’s determination to kickstart growth will cause the American economy to overheat.

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“While inflation is not showing up in the data right now, inflation is on its way thanks to fiscal and monetary stimulus and pent-up consumer demand that should intensify as the economy reopens,” Nancy Davis, founder of Quadratic Capital Management, said in a note.

In a speech Wednesday, Federal Reserve Chair Jerome Powell said the U.S. job market remains a long way from a full recovery and called on both lawmakers and the private sector to support workers. He also said it will require more than supportive monetary policy to achieve and sustain maximum employment.

Elsewhere in markets, oil slumped after capping the longest run of gains in two years. The dollar held steady and Bitcoin climbed above $47,000. In Asia, several markets in the region were closed ahead of the Lunar New Year holiday.

Here are some key events coming up:

• Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.
• Bank of Russia’s policy decision comes Friday.

These are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.2% as of 4 p.m. in New York.
• The Stoxx Europe 600 Index advanced 0.5%.
• The MSCI Asia Pacific Index increased 0.2%.
• The MSCI Emerging Market Index advanced 0.4%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The euro advanced 0.1% to $1.2125.
• The British pound fell 0.2% to $1.3806.
• The Japanese yen weakened 0.2% to 104.79 per dollar.

Bonds

• The yield on 10-year Treasuries advanced one basis point to 1.15%.
• The yield on two-year Treasuries was unchanged at 0.11%.
• Germany’s 10-year yield decreased two basis points to -0.46%.
• Britain’s 10-year yield decreased two basis points to 0.47%.

Commodities

• West Texas Intermediate crude fell 0.8% to $58.22 a barrel.
• Gold fell 0.9% to $1,826.68 an ounce.

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