Treasury yields slip, US stocks rise with tech; investors assess US tax bill

NEW YORK/LONDON :Thirty-year U.S. yields reached their highest level in 19 months before easing on Thursday, with worries lingering over the U.S. fiscal outlook and demand for government debt, while Wall Street stocks edged higher with gains in tech-related shares.

The U.S. dollar strengthened after recent losses.

The U.S. House of Representatives passed President Donald Trump’s tax bill by a single vote, adding to worries about the country’s debt load. The bill would deliver new tax breaks on tips and car loans and boost spending on the military and border enforcement.

Moody’s late last week became the last of the major credit rating agencies to strip the U.S. of its coveted triple-A status.

Thirty-year U.S. yields were last down 3.2 basis points at 5.0573 per cent. Soft demand for a $16 billion sale of 20-year bonds on Wednesday increased concerns about reduced interest in U.S. debt.

Earlier, benchmark German 20-year yields reached their highest in two months.

U.S. stocks were higher on Thursday after falling sharply in the previous session.

“It’s amazing how resilient this (stock) market can be… given all of the uncertainty and potential bad news out there,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.

“Tech is the market’s security blanket at this point.”

The Dow Jones Industrial Average rose 51.28 points, or 0.12 per cent, to 41,912.24, the S&P 500 was up 8.79 points, or 0.15 per cent, at 5,853.45 and the Nasdaq Composite gained 118.49 points, or 0.63 per cent, to 18,990.84.

Shares of Alphabet climbed 2.5 per cent, with the communication services sector up 0.9 per cent.

MSCI’s gauge of stocks across the globe fell 1.92 points, or 0.22 per cent, to 872.01. The pan-European STOXX 600 index slipped 0.72 per cent.

Britain’s government borrowed more than expected in April, figures showed, while euro zone business activity unexpectedly slipped back into contraction territory.

The euro stumbled after the data, while the U.S. dollar rose after three days of losses. The euro was down 0.44 per cent at $1.1279. In late morning trading in New York, the dollar edged up 0.1 per cent to 143.75 yen after earlier dropping to 142.80, its weakest level since May 7.

Bitcoin, meanwhile, rose again to an all-time high, partly as investors sought out alternatives to U.S. assets.

The non-partisan Congressional Budget Office estimates Trump’s tax-cut bill will add $3.8 trillion to the $36.2 trillion in U.S. debt over the next decade.

A report that OPEC+ is discussing a production increase for July weighed on oil prices.

U.S. crude fell 1.45 per cent to $60.69 a barrel and Brent fell to $63.93 per barrel, down 1.51 per cent on the day.