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Boeing Paces Modest Dow Rebound, Tech Stocks Get Boost As Treasury Yields Ease

TheStreet logo TheStreet 9/29/2021 Martin Baccardax
a group of people in a room: Boeing Paces Modest Dow Rebound, Tech Stocks Get Boost As Treasury Yields Ease © TheStreet Boeing Paces Modest Dow Rebound, Tech Stocks Get Boost As Treasury Yields Ease

U.S. stocks bounced modestly higher Wednesday, while Treasury bond yields eased from multi-month peaks, as investors looked to claw back some of yesterday's declines while closely tracking negotiations tied to the debt ceiling and the ongoing impact of the rolling global power crisis.

Markets were given an added boost early in the session, as well, as Senate Majority Leader Chuck Schumer said Democrats were working on plan to avoid a government shutdown that could be put in place as early as today.

Benchmark 10-year note yields slipped to 1.506% in early Wednesday trading as growth concerns, linked to both power cuts in China and surging energy costs in Europe, overtook worries about faster near-term inflation. That move, alongside a bullish outlook from ASML Holding , the a crucial supplier to the global semiconductor sector, is helping tech stocks stage a solid pre-market comeback.

ASML, which makes extreme ultraviolet lithography systems (EUV) systems which design complex chips used by, sector titans such as Samsung Electronics, Intel Corp. and Taiwan Semiconductor that cost as much as €160 million each, said Wednesday that "global megatrends in the electronics industry will produce revenue growth of around 11% a year over the next decade.

European stocks rebounded from yesterday's tumble, the biggest since July, with a 1% gain powered by tech and energy shares while Asia, caught in the downdraft from Wall Street's Wednesday slump, fell 0.75%.

In the U.S., concerns linked to a government shutdown later this week, as well as failure to suspend the nation's $28.4 trillion debt ceiling, continue to keep bulls in check, however, after another effort by Democratic lawmakers to break a Senate deadlock failed to advance last night.

JPMorgan CEO Jamie Dimon, in fact, said he and his colleagues are preparing for a "potentially catastrophic" failure to raise the debt ceiling this week as Senate lawmakers continue to bicker into the final hours ahead of tomorrow's deadline.

On Wall Street, the Dow Jones Industrial Average, which turned negative for the month after last night's 570 point slump, clawed back 185 points by late morning, while the S&P 500 bumped 20 points into the green.

Boeing is providing a solid boost to the Dow with a 4.55% gain after the planemaker said a 737 MAX test in China "went off without a hitch" last month, potentially providing authorities with enough data to return the aircraft to service in the world's biggest aviation market.

The Nasdaq Composite gained 35 points to start the trading session, thanks in part to pre-market advances for Apple , Tesla and Nvidia .

Micron shares, however, fell 1.6% after one of the world's biggest memory chipmaker said supply-chain disruptions in the tech sector would hit its current quarter sales.

Dollar Tree surged the most in more than two years Wednesday after the discount retailer said it would begin testing the sale of higher-priced items in some of its stores and boosted its share buyback program to $2.5 billion.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, held onto recent gains overnight to trade at 94.252 -- the highest levels of the year -- even as the threat of a government shutdown looms.

The dollar's gains took some steam out of oil prices, which eased from three-year highs alongside a surprise 4.1 million barrel increase in U.S. crude stocks reported by the American Petroleum Institute late Tuesday, but the declines didn't last.

WTI futures for November delivery traded 17 cents higher on the session at $75.46 per barrel while Brent contracts for the same month, the global pricing benchmark, were flat from yesterday at $79.07 per barrel.

Natural Gas futures for delivery on October 21 were around 5% lower than yesterday's seven-year highs at $5.78 per million British thermal units (mmBtu).

This article was originally published by TheStreet.


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