February 28, 2024

Stocks and Bonds: Wall Street Rises Until the Final Hours

The early gains, mirroring those in European markets, suggested that investors had shrugged off the downgrade of Italy’s debt by the credit ratings agency Standard Poor’s. The S. P. downgrade late Monday took aim at the euro zone’s most indebted member after Greece.

On Wall Street, the major indexes were about 1 percent higher for most of the day, but closed mixed. The Dow Jones industrial average was up 7.65 points, or 0.1 percent, at 11,408.66, and the Standard Poor’s 500-stock index was down 2 points, or 0.2 percent, at 1,202.09. The Nasdaq composite index was down 22.59 points, or 0.9 percent, at 2,590.24. The Euro Stoxx 50 index was up 2.1 percent and the FTSE 100 in London rose 2 percent.

Analysts said investors could have reacted to discussions about aiding Greece, where talks with foreign creditors — the International Monetary Fund, the European Commission and the European Central Bank — described as productive on Monday continued on Tuesday. That buoyed some of the sentiment during the day, although uncertainty over the meeting seemed to take hold in the last hour of trading in the United States, said Stephen J. Carl, head equity trader at the Williams Capital Group.

After the market closed, the Greek Finance Ministry said the talks yielded “satisfactory progress.”

In addition, many investors have concluded that the Federal Reserve will announce new steps to promote economic growth after a two-day meeting of its policy-making group ends on Wednesday.

“The thought is that Operation Twist is going to be announced tomorrow,” said Michael A. Mullaney, a vice president for the Fiduciary Trust Company, using an insider phrase to describe when the Fed sells shorter-term securities for longer-term ones. “Quite frankly, most likely it is going to be ‘buy the rumor, sell the news.’ ”

Such a move by the Fed would reflect an effort to reduce long-term interest rates, which would allow businesses and consumers to borrow more cheaply. The United States Treasury’s 10-year note rose 5/32, to 101 22/32. The yield fell to 1.94 percent, from 1.96 percent late Monday. In explaining its move on Italy, S. P. cited weakening prospects for economic growth and higher-than-expected levels of government debt as reasons for lowering its debt rating by one notch to A from A+.

Matthew Saltmarsh, Niki Kitsantonis and Elisabetta Povoledo contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=be23b7d4340eaa266f83dd074d0fe60c

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