Stock market's advance on tame inflation reading stalls

Joanna Estrada
March 14, 2018

Shares of Broadcom jumped 3.2 per cent after a Wall Street Journal report that Intel is considering bidding for the chip company, which has undertaken a hostile campaign to buy Qualcomm. Boeing and Caterpillar were the biggest decliners on the Dow.

"The big multinational, industrial companies of the world are all taking a hit on the concern that they will be the targets of reprisal sanctions", said Robert Phipps, a director at Per Stirling Capital Management in Austin.

In the bond market, U.S. Treasury prices edged higher, pushing yields lower; the benchmark 10-year yield slipped 2 bps to 2.87% as a $21B 10-year note auction drew a high yield of 2.889% on a bid-to-cover of 2.50, slightly above the average of the prior 12 auctions.

The tech-heavy Nasdaq, however, gained around 0.6 percent, helped in part by what traders read as further signs of official disapproval of Broadcom's $117 billion bid for USA graphics chipmaker Qualcomm.

The Dow Jones industrial average closed 171 points lower.

Despite recent gains the index is still down four per cent year to date, with Canada's markets still lacking the sparks of the US economy, said Michael Currie, vice-president of TD Wealth Private Investment Advice.

Sterling rose on optimism that a Brexit transition deal might be agreed next week, after a junior minister said Britain was very close to sealing one with the European Union.

In Asian markets, Japan's Nikkei Stock Average rose 1.65 percent, Hong Kong's Hang Seng Index gained 1.93 percent, China's Shanghai Composite Index climbed 0.59 percent and India's BSE Sensex jumped 1.83 percent. On the Nasdaq, 1,509 issues rose and 860 fell. Wall Street stocks advanced early today, keeping positive momentum from last week's strong jobs report ahead of key data releases on U.S. inflation and retail sales.

The pullback in wages tempered speculation the Federal Reserve would project four rate hikes - or dot plots - at its policy meeting next week, instead of the current three.

The news came shortly after the Labor Department said its consumer price index rose 0.2% in February.

Other reports by Click Lancashire

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