US markets end higher on falling bond yields

02 Mar 2021 Evaluate

The US markets ended higher on Monday on rising hopes about additional stimulus after the House passed a $1.9 trillion coronavirus relief bill. The market also reacted positively to report that Johnson & Johnson’s (JNJ) single-shot Covid-19 vaccine received emergency use authorization from the FDA on Saturday, paving the way for its distribution. A drop in Treasury yields contributed as well to the bullish sentiment in the stock market. The yield on the benchmark ten-year note is moving lower for the second straight session after ending last Thursday’s trading at its highest closing level in a year. Yield on 10-year US Treasury Note eased to almost 1.4 percent on Monday, after having surged to 1.6 percent last week.

On the economic data front, the Institute for Supply Management (ISM) released a report showing US manufacturing activity grew at an accelerated rate in the month of February. The ISM said its manufacturing PMI rose to 60.8 in February from 58.7 in January, with a reading above 50 indicating growth in the manufacturing sector. Street had expected the index to inch up to 58.8. A separate report released by the Commerce Department showed US construction spending increased by much more than anticipated in the month of January, rising by 1.7 percent to an annual rate of $1.522 trillion, after jumping by 1.1 percent to a revised rate of $1.497 trillion in December. Street had expected construction spending to climb by 0.8 percent.

Dow Jones Industrial Average gained 603.14 points or 1.95 percent to 31,535.51, Nasdaq rose 396.48 points or 3.01 percent to 13,588.83 and S&P 500 was up by 90.67 points or 2.38 percent to 3,901.82.