Federal Reserve Chair Janet Yellen's non-policy remarks at an annual meeting of central bankers in Jackson Hole, Wyoming pushed U.S. Treasury debt yields lower and increased chances that the U.S. central bank will not raise interest rates in December as had been widely anticipated.
The euro, meanwhile, jumped more than 1 percent after European Central Bank President Mario Draghi, speaking after Yellen, did not talk down the euro zone single currency's strength as some investors had speculated.
Yellen told bankers that regulatory reforms enacted after the financial crisis a decade ago have strengthened the banking system without impeding economic growth.
Draghi said global trade and cooperation is under threat, a risk to productivity and ultimately growth in advanced economies.
Investors had to pay attention to Yellen's speech, but she didn't discuss monetary policy, said Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co.
"There was a risk that Yellen would've said something," Chandler said.
Draghi's speech drew similar comments.
"People were wondering whether he would push back against the euro strength or lean against it and he didn't," said Keith Lerner, chief market strategist at SunTrust Advisory Services Inc. in Atlanta.
The dollar index <.DXY> fell 0.78 percent and the euro
Benchmark 10-year U.S. Treasury notes
JJ Kinahan, chief market strategist at TD Ameritrade in Chicago, said with the 10-year note returning less than 2.2 percent, investors are drawn to stocks.
"You are starting to see stocks hang in there only because everybody is searching for yield," Kinahan said.
Rates futures implied traders saw a 37.2 percent chance of a rate hike at the Fed's December meeting, down from almost 39 percent on Thursday, CME Group's FedWatch tool showed.
MSCI's index of stocks across the globe <.MIWD00000PUS> rose 0.26 percent and its index of emerging market stocks <.MSCIEF> rose 0.27 percent.
The Dow Jones Industrial Average <.DJI> closed up 30.27 points, or 0.14 percent, to 21,813.67. The S&P 500 <.SPX> gained 4.08 points, or 0.17 percent, to 2,443.05 and the Nasdaq Composite <.IXIC> dropped 5.68 points, or 0.09 percent, to 6,265.64.
European share markets closed lower. The pan-regional FTSEurofirst 300 index <.FTEU3> slid 0.14 percent as Dutch supermarket operator Ahold (>> Ahold Delhaize) fell 6.1 percent after Amazon (>> Amazon.com) said it will cut prices when its acquisition of Whole Foods Market (>> Whole Foods Market, Inc.) is completed on Monday.
Ahold has a strong presence on the U.S. east coast.
Investor concerns about a looming deadline in late September to raise the U.S. debt ceiling were alleviated after U.S. Treasury Secretary Steven Mnuchin said that after talks with congressional leaders from both parties, everyone is "on the same page."
Oil prices rose as the dollar fell and as the U.S. petroleum industry braced for Hurricane Harvey, which could become the biggest storm to hit the U.S. mainland in more than a decade.
U.S. crude
(Reporting by Herbert Lash; Editing by Bernadette Baum and James Dalgleish)
By Herbert Lash
