news/COST/2023.03.03/Wall Street set for weekly gain as yields pull back.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*Treasury yields slip after rally*Indexes set for weekly gains*Indexes up: Dow 0.67%, S&P 1.03%, Nasdaq 1.29%March 3 (Reuters) - U.S. stock indexes rose on Friday,
on course for weekly gains, as Treasury yields took a breather
from a week-long rally that was sparked by worries that the
Federal Reserve would keep interest rates higher for longer to
tame stubborn inflation.Trading has been choppy this month after economic data
pointed to rising raw material costs and a resilient labor
market, signaling the U.S. central bank was yet to see the
desired impact of its monetary policy tightening on inflation.The U.S. 10-year Treasury yield fell on Friday
after touching a four-month high in the previous session, but
hovered near the 4% level.The Institute for Supply Management's survey showed the U.S.
services sector grew at a steady clip in February, with new
orders and employment rising to more than one-year highs,
suggesting the economy continued to expand in the first quarter."The ISM (survey) arguably came in close to expectations,
but it still signals growth," John Augustine, chief investment
officer at Huntington National Bank."To see long-term yields down today is a surprise, but
recession fears seem to be receding and the expectation that the
Fed will tighten hasn't changed."U.S. stocks closed higher on Thursday after Atlanta Fed
President Raphael Bostic said the impact of higher rates on the
economy might only begin to "bite" in earnest this spring, an
argument for the Fed to stick with "steady" quarter-point rate
increases.The three main indexes were set for weekly gains, with the
Dow set for its first weekly rise in five.Hawkish comments from Fed policymakers and recent economic
data have pushed traders to price in at least three more 25
basis point rate hikes this year and see interest rates peaking
at 5.46% by September from 4.66% at present.The odds of a 50 basis point rate hike in March stood at
just 20%, but investors are awaiting monthly payrolls and
consumer prices data to see if the Fed will go big later this
month.The Fed is "acutely aware" of the challenges high
inflation poses to the economy and is "strongly committed" to
its 2% target, the central bank said in its latest semiannual
report to Congress on monetary policy and the economy.At 11:56 a.m. ET, the Dow Jones Industrial Average
was up 221.75 points, or 0.67%, at 33,225.32, the S&P 500
was up 41.12 points, or 1.03%, at 4,022.47, and the
Nasdaq Composite was up 148.13 points, or 1.29%, at
11,611.12.The S&P 500 was trading above its 200-day moving average,
seen as a key support level by traders, for a second session.Apple Inc rose 2.7% after Morgan Stanley said
the stock could rally more than 20% this year on potential
hardware subscription.Meanwhile, Costco Wholesale Corp slipped 3.1% after
the membership-only retail chain missed second-quarter revenue
estimates, as consumers cut back on spending amid high
inflation.Broadcom Inc rose 4.8% after the chipmaker forecast
second-quarter revenue above analysts' estimates as increased
investments in AI spurred demand for chips.Advancing issues outnumbered decliners by a 3.83-to-1 ratio
on the NYSE and 1.92-to-1 ratio on the Nasdaq.The S&P index recorded 17 new 52-week highs and two new
lows, while the Nasdaq recorded 59 new highs and 43 new lows.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil
D'Silva and Shinjini Ganguli)