Wall Street rises, Treasury yields fall on data hinting at Fed pause.

Wall Street Extends Gains as Investors⁤ Adjust Expectations

By‍ Stephen Culp

NEW YORK (Reuters) – ⁣Wall Street extended the previous day’s⁣ gains on Tuesday while the dollar see-sawed amid light, pre-Labor Day‍ trading as investors continued to adjust their expectations for U.S. monetary policy.

After ⁢an uncertain start,‍ all three major U.S. stock indexes coalesced to ⁢a modest advance, as investors looked ahead ​to ⁤economic data later this⁢ week that‌ could sway the Federal Reserve’s‍ interest rate decisions ⁣in the​ coming months.

“If (the​ data) continues to go in the right direction there’s a chance ​the Fed ⁤might⁢ hold interest rates,” said Peter Cardillo, chief market economist​ at Spartan ⁢Capital Securities in New York. “The Fed continues to talk‍ tough,⁢ but its action depends ​on inflation.”

A smattering of U.S. economic⁤ data released on Tuesday showed dampening‍ consumer sentiment and a bigger-than-expected drop in job openings, offering evidence that the central ‍bank’s efforts to ⁢rein ⁤in inflation by throwing cold water on the economy is having its intended effect.

But as market participants drift toward a ‌three-day holiday weekend, volumes are likely to be unusually light, which can lend itself to increased volatility. ⁣

Data due as the week draws to a close include ⁤August payrolls, July PCE inflation⁣ and ‌the Commerce Department’s second take on April-June GDP.

“We’ll probably see the real reaction to the data next‍ Tuesday, because of the holidays,” Cardillo added. “We’re entering September ⁤which is generally a precarious month for stocks.”

The Dow Jones Industrial Average rose 77.08⁢ points, or 0.22%, to 34,637.06, the S&P 500 gained 31.92 points, ⁤or 0.72%, ⁤to 4,465.23 and the Nasdaq Composite added 169.69 points, or 1.24%, to 13,874.82.

European shares extended their rally with​ a boost from the mining‍ sector as Beijing’s ⁢recent policy moves to jump-start China’s languid economy fueled demand hopes.

The​ pan-European STOXX 600‍ index rose 0.92% and MSCI’s gauge of stocks ⁢across the ⁣globe gained 0.83%.

Emerging market stocks rose⁣ 0.96%. MSCI’s broadest index of Asia-Pacific⁤ shares outside Japan closed ‍1.17% higher, while Japan’s Nikkei rose 0.18%.

U.S. Treasury yields extended Monday’s decline, with 10-year notes touching near three-week lows.

Benchmark 10-year‍ notes last rose 16/32 in ​price to yield‌ 4.151%, down from 4.212% late on Monday.

The 30-year bond‌ last rose 22/32 in ⁤price to yield 4.2482%, from 4.289% late on Monday.

The dollar fluctuated against⁣ a basket of world currencies, giving up ⁤earlier gains after job openings data bolstered the case for a Fed⁢ pause, ⁣while the Japanese yen hovered near levels ⁤that provoked​ intervention last year.

The dollar index fell 0.24%, with⁤ the euro up 0.14% to $1.0832.

The yen strengthened 0.04% versus the greenback ⁣at 146.48 per dollar but still‍ hovered close to last year’s intervention range, while ⁣sterling was⁢ last trading at $1.2595, down 0.06%​ on the day.

Oil prices steadied as supply concerns resulting from a hurricane churning off the U.S. Gulf coast counterbalanced concerns ​over softening global demand.

U.S. crude fell 0.04% to $80.07 per⁣ barrel and Brent was last ‍at $84.57, up 0.18% on ‍the day.

Gold prices gathered upward⁢ momentum in the wake ‍of weaker than ‌expected U.S. data.

Spot gold‌ added⁤ 0.7% to $1,932.39 an ounce.

⁤(Reporting by Stephen Culp; Editing by Susan Fenton)

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