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Equities, yields rise as U.S. data shows economy gaining momentum

Berita 24 English -  On Thursday, global equity markets and US Treasury yields increased as better-than-expected jobless claims data. A posi...

Berita 24 English - 
On Thursday, global equity markets and US Treasury yields increased as better-than-expected jobless claims data. A positive report on first-quarter gross domestic product indicated that the economic recovery is gaining traction.

According to the US Labor Department, the number of Americans filing new unemployment claims fell to 406,000 for the week ended May 22, as layoffs decreased and businesses scrambled for workers to meet surging demand unleashed by a rapidly reopening economy.

This was the lowest level since mid-March 2020 and maintained a three-week streak of claims below 500,000. Reuters polled economists who forecasted 425,000 applications for the most recent week.

Separately, the Commerce Department confirmed on Thursday that economic growth accelerated to a 6.4 per cent annualized rate in the third quarter, owing to the massive fiscal stimulus.

The data, which were not revised from last month's estimate, indicated the second-fastest growth in the economy since the third quarter of 2003.

The benchmark 10-year Treasury note yield increased to 1.6028 per cent late Wednesday, up from 1.574 per cent.

"This is the first time that continuing jobless claims have exceeded expectations, indicating that more people are resuming work, which is extremely beneficial for the economy," said Thomas Hayes, managing member at Great Hill Capital.

MSCI's world equity index increased 0.05 per cent to 708.87 points. Europe's broadest stock index gained 0.27 per cent, with industrials, financials, and basic materials sectors leading the way.

On Wall Street, the benchmark S&P 500 and Dow Jones Industrial Average closed higher, led by financial, industrial, and consumer discretionary stocks. The Nasdaq composite index finished lower, weighed down by weakness in technology stocks such as Apple Inc. and Microsoft Corp.

The Dow Jones Industrial Average increased by 0.41 per cent to 34,464.64, the S&P 500 increased by 0.12 per cent to 4,200.88, and the Nasdaq Composite decreased by 0.01 per cent 13,736.28.

In Asia overnight, MSCI's broadest index of Asia-Pacific shares outside Japan recovered losses to close flat, just below Wednesday's near-two-week high.

Numerous Federal Reserve officials made comments this week to assuage inflation fears and sign the possibility of initiating discussions to wind down the central bank's bond-buying program.

Vice-Chair Richard Clarida stated this week that recent inflation pressures would "most likely prove to be transitory." However, he added that policymakers would be ready to discuss tapering in upcoming meetings.

Randal Quarles, the Fed's vice chairman for supervision, suggested that at some point, the US central bank will need to discuss plans to tighten its asset purchase program.

On Thursday, the dollar index traded in a narrow range as traders focused on an upcoming inflation report closely watched by the Federal Reserve. The index fell 0.075%.

On Thursday, safe-haven gold was little changed, weighed down by upbeat US data that indicated the recovery was on track while rising Treasury yields added to the pressure.

Gold futures increased 0.01 per cent to $1,896.6906 an ounce, remaining stable below the psychological $1,900 level.

Oil prices rose on Thursday, boosted by strong economic data from the United States, which offset investors' concerns about the possibility of an increase in Iranian supply. [L2N2NE098] [L2N2NE098]

Brent crude oil gained 59 cents, or 0.9%, to settle at $69.46 a barrel. West Texas Intermediate (WTI) crude oil in the United States increased 64 cents, or 1%, to settle at $66.85 a barrel.

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