By Caroline Valetkevitch
NEW YORK, May 20 (Reuters) – Stock indexes rose around the globe on Thursday, with the S&P 500 climbing more than 1% led by sharp gains in technology shares, while U.S. Treasury yields fell after a weaker-than-expected U.S. business activity reading.
The Philadelphia Federal Reserve Bank said its business activity index fell to 31.5 from 50.2 in April, its highest pace in nearly half a century. The reading was shy of economists’ expectations of 43.0, a Reuters poll found, and cast doubt on how fast the economy can continue to heat up.
Cryptocurrencies bounced back from their recent sharp drop, but were well off the day’s highs by afternoon New York time, as U.S. regulators signaled greater oversight for the sector.
Bitcoin BTC=BTSP was most recently up about 8% at $40,035 after some of its prominent backers reiterated their support for the digital currency, having plummeted to 54% below its record high, hit just over a month ago.
Smaller rival ether ETH=BTSP gained about 14% to $2,782. On Wednesday, it fell 22.8%, its biggest daily fall since March 2020.
Investors are also still digesting minutes from the Fed’s meeting last month, which showed a number of officials thought that if the recovery holds up it might be appropriate to “begin discussing a plan for adjusting the pace of asset purchases.”
Other data Friday showed the number of Americans filing new claims for unemployment benefits dropped further below 500,000 last week, but jobless rolls swelled in early May, which could temper expectations for an acceleration in employment growth this month.
The S&P 500 technology index .SPLRCT ended up 1.9%.
The Dow Jones Industrial Average .DJI rose 188.11 points, or 0.55%, to 34,084.15, the S&P 500 .SPX gained 43.44 points, or 1.06%, to 4,159.12 and the Nasdaq Composite .IXIC added 236.00 points, or 1.77%, to 13,535.74.
The pan-European STOXX 600 index .STOXX rose 1.27% and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.95%.
The yield on benchmark 10-year Treasury notes US10YT=RR fell 4.3 basis points to 1.640%.
Market expectations of a further rise in inflation would need evidence of the economy moving past full employment very, very rapidly, said Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC.
“We’ve probably already reached the peak level of economic activity, and that probably happened in March and April,” Ricchiuto added.
In the foreign exchange market, the dollar lost ground and was hovering near multi-month lows.
Late in New York, the dollar index =USD fell 0.491%, with the euro EUR= down 0.01% to $1.2225.
The bounces in cryptocurrencies came after crypto backers such as Ark Invest’s ARKK.P Cathie Wood and Tesla’s Elon Musk indicated their support on Wednesday.
Concerns over tighter regulation in China and unease over the extent of leveraged positions in the cryptocurrency world had caused this week’s big selloff.
Outages at several major trading platforms during the maelstrom, which also set ether ETH= tumbling nearly 50%, did little to inspire confidence.
SPACs – special purpose vehicles set up and listed to buy up other firms – experienced huge growth last year, as did the ARK innovation fund that focuses on tech companies.
Oil prices dropped more than 2% after diplomats said progress was made toward a deal to lift U.S. sanctions on Iran. Brent crude LCOc1 fell $1.55, or 2.3%, to settle at $65.11 a barrel. West Texas Intermediate crude Clc1 ended $1.31, or 2.1%, lower at $62.05 a barrel. Both contracts fell around 3% in the previous session.
Spot gold XAU= was nearly flat.
World FX rates YTDhttp://tmsnrt.rs/2egbfVh
Global asset performancehttp://tmsnrt.rs/2yaDPgn
Crypto-mayhemhttps://tmsnrt.rs/3fMFRur
India’s debts are highest among clutch of potential fallen angelshttps://tmsnrt.rs/33AbQIc
(Additional reporting by Marc Jones in London, Herbert Lash, Stephanie Kelly and Stephen Culp in New York; Medha Singh and Shashank Nayar in Bengaluru; Tom Westbrook in Singapore; Editing by Will Dunham and Richard Pullin)
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