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STOXX 600 closes at 14-month high
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MSCI index touches highest since Feb. 3
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U.S. 10-year yield falls for first time in four sessions
NEW YORK, April 18 (Reuters) - A gauge of global stocks rose on Tuesday to reach its highest point since early February as the pace of U.S. earnings season picked up, while Treasury yields dipped after three straight sessions of gains.
On Wall Street, the S&P 500 was roughly unchanged, while a 1.50% drop in Goldman Sachs after its quarterly results, as well as a 2.48% decline in fellow Dow component Johnson & Johnson despite boosting its profit forecast, weighed on the Dow Industrials to also hold the index near the flat line, offsetting gains in Home Depot and Boeing.
Goldman peer Bank of America veered between gains and losses in choppy trading after its earnings beat estimates, and was last up 0.41%.
"If you look at the earnings expectations they have been coming down but you started in a good place with the large financials, you have some regionals reporting after the bell tonight, which might give us a bit of a clue on what is happening in terms of the recycling of credit within the small-and-mid cap areas of the market," said Colin Graham, head of multi-asset strategies at Robeco in Rotterdam.
"I will be much more interested in what the consumer staples, telcos, all these other companies say."
The Dow Jones Industrial Average rose 12.04 points, or 0.04%, to 33,999.22 the S&P 500 gained 2.8 points, or 0.07%, to 4,154.12 and the Nasdaq Composite dropped 10.44 points, or 0.09%, to 12,147.28.
European shares closed higher, in part due to solid economic data from China, led by gains in travel and leisure stocks, and the STOXX 600 closed at its highest level since Feb. 11, 2022.
The pan-European STOXX 600 index rose 0.38% and MSCI's gauge of stocks across the globe gained 0.23%. MSCI's index had earlier reached its highest level since Feb. 3 at 658.29.
Investors have turned their focus to corporate earnings as the market has largely priced-in a 25 basis points rate hike from the Federal Reserve at its May meeting, according to CME's FedWatch Tool, with expectations at 84%.
St. Louis Federal Reserve President James Bullard said on Tuesday in an interview with Reuters that the Fed should continue hiking interest rates as recent data has shown persistent inflation in an economy that is likely to continue to grow.
However, Atlanta Federal Reserve President Raphael Bostic said in an interview with CNBC the Fed most likely only has one more hike ahead.
U.S. Treasury yields dipped, with the benchmark 10-year falling for the first time after three straight sessions of gains, as investors weighed whether the Fed would pause its rate hike cycle after the May meeting.
The yield on 10-year Treasury notes was down 1.7 basis points to 3.574% while the two-year U.S. Treasury yield, which typically moves in step with rate expectations, was up 1.1 basis points at 4.199%.
The dollar was weaker against most major currencies after the data from China, while the pound strengthened against he greenback thanks to pay growth data in Britain boosting expectations the Bank of England will raise rates in May.
The dollar index fell 0.392%, with the euro up 0.42% to $1.0972.
The Japanese yen strengthened 0.34% versus the greenback at 134.03 per dollar, while Sterling was last trading at $1.2431, up 0.46% on the day.
Oil prices edged higher, as the upbeat China data helped allay concerns that rising rates could dent the growth outlook and sap demand.
U.S. crude recently rose 0.33% to $81.10 per barrel and Brent was at $84.98, up 0.26% on the day.
(Reporting by Chuck Mikolajczak, Editing by Nick Zieminski)
