Dow back in the black for 2015 as bond yields hit nearly 9-month high
Stocks surged and bond yields hit nearly nine-month highs Wednesday as good news on Greek debt talks and U.S. wage growth encouraged investors to step up and take some risk.
The Dow Jones industrial average scored its best gain in a month, a 236.36-point, 1.3% rise to 18,000.40 that put the blue-chip barometer back in the black for 2015. It was the Dow's best day since a 267-point jump on May 8.
The other major U.S. indexes fared well too. The Standard & Poor's 500 climbed 25.05 points, or 1.2%, to 2105.20 and the tech-heavy Nasdaq composite rose 62.82 points, or 1.3%, to 5076.69.
As investors were buying stocks, they were dumping bonds again. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.48% - nearly crossing 2.5% for the first time since Sept. 26.
An increased willingness to take risk drove the flight from bonds to stocks, says Boris Rjavinski, fixed income strategist at UBS.
"There were news of possible compromise between Greece and its lenders, which might help set risk-on tone to the markets," Rjavinski says. Another bullish data point, he adds, was an employee compensation indicator released in the U.S. Wednesday that showed a 4.9% increase year-on-year."
Oil sold on the U.S. market is ticking up, now back above the $60-per-barrel level.
Netflix shot to an all-time high on a potential stock split on its high per-share price tag. NFLX is up 4.5% on the day, to $677.30.
The Dow Jones industrial average's big May 8 jump came as investors reacted to a strong April jobs report following a super-weak reading on jobs in March.
"After four straight session in the red, the Dow has bounced back wth a vengeance today," Andrea Kramer, an analyst at Schaeffer's Investment Research, noted in a midday market update.
Kramer says the bullish price action is being driven by tech and energy issues as well as a drop in the value of the U.S. dollar vs. a basket of foreign currencies, which makes exports from U.S. firms more affordable.
The rally is also gaining steam, adds Kramer, from "reports" that "Germany could unlock aid" for debt-strapped Greece if (Athens) "agrees to at least one economic reform."
The mere hint of a thaw in the deadlock between Greece and its eurozone creditors is being viewed as a major positive by Wall Street.
However, stocks -- which some on Wall Street had said are becoming "oversold" on Greece fears and concerns over when the Federal Reserve will start hiking short-term interest rates -- are still stuck in a multi-month trading range.