Wall St gains as investors digest economic data, Treasury yields steady

Sept 28 (Reuters) – Wall Street’s main indexes gained on Thursday as investors assessed the latest batch of economic data and as Treasury yields steadied ahead of a key inflation report.

Investors were also watching developments in Washington to see whether U.S. lawmakers could avert a government shutdown.

The recent move in Treasury yields to 16-year highs has loomed over the stock market after the Federal Reserve last week signaled a hawkish long-term outlook for interest rates.

The yield on the benchmark 10-year Treasury was last at around 4.6%, down slightly on the day.

“What we have seen is that when the 10-year yield is up, it exerts downward pressure on stocks,” said Kristina Hooper, chief global market strategist at Invesco.

“A lot of that has to do with valuations, when they are at higher levels.”

The Dow Jones Industrial Average (.DJI) rose 71.70 points, or 0.21%, to 33,621.97, the S&P 500 (.SPX) gained 21.61 points, or 0.51%, to 4,296.12 and the Nasdaq Composite (.IXIC) gained 101.03 points, or 0.77%, to 13,193.88.

Among S&P 500 sectors, communication services (.SPLRCL) rose 1.1%, while materials (.SPLRCM) gained 0.9%. The rate-sensitive utilities sector (.SPLRCU) sank 1.6%, continuing its recent slide.

For the week so far, the S&P 500 remained lower. The S&P 500 has pulled back over 6% since late July, but remains up over 11% for 2023.

Data showed the U.S. economy maintained a fairly solid pace of growth in the second quarter.

Separate readings showed initial jobless claims rose slightly last week and a higher-than-expected fall in contracts to buy existing homes in August.

Investors were looking ahead to Friday’s personal consumption expenditures price index for the latest view on inflation.

Also in focus were comments by Federal Reserve Chair Jerome Powell, expected later on Thursday.

In Washington, the Democratic-led U.S. Senate forged ahead with a bipartisan stopgap funding bill aimed at averting a fourth partial government shutdown in a decade, while the House prepared to vote on partisan Republican spending bills with no chance of becoming law.

In company news, Micron Technology (MU.O) shares dropped 4.5% after the chip company forecast a bigger loss than analysts had expected.

Accenture shares slumped 4.7% after the IT services firm forecast full-year earnings and first-quarter revenue below Wall Street targets.

Advancing issues outnumbered decliners by a 2-to-1 ratio on the NYSE. There were 58 new highs and 300 new lows on the NYSE.

On the Nasdaq advancing issues outnumbered decliners by a 1.7-to-1 ratio. The Nasdaq recorded 33 new highs and 277 new lows.

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