Traders will closely be watching the outcome of a Treasury auction of $29 billion in 7-year notes. Fewer-than-expected buyers emerged for Tuesday’s government’s auction of $35 billion in five-year bonds, which sent the yield on the 10-year Treasury note to 3.49 percent from 3.34 percent the previous day. The move also sent the blue-chip indexes slightly higher.
In early trading, the Dow Jones industrial average rose 31.18 points, or 0.27 percent. The broader Standard & Poor’s 500-stock index rose 2.48 or 0.19 percent. The Nasdaq gained 4.03, or 0.15 percent.
Trading volumes on Wall Street are expected to be light throughout the week. Many investors have already closed their books for the year and are on vacation until January.
Overseas, Chinese stocks led most markets higher as they rebounded after hefty declines in the wake of last weekend’s interest rate increase from the country’s central bank.
In Europe, the DAX in Frankfurt was up 26.86 points, or 0.39 percent, while the CAC-40 in Paris rose 38.53 points, or 1 percent.
The FTSE 100 in London fell 13.21 points, or 0.22 percent, after a four-day break — on Christmas Eve, the FTSE closed above 6,000 for the first time since the summer of 2008.
Analysts said that the 6,000 level may act as a barrier to any more sustained gains before the year-end when much of the trading flow is reliant on investors closing out positions to present their portfolios in as strong a light as possible.
“Before Friday, the FTSE hadn‘t closed above 6000 since June 2008, and it will now be interesting to watch and see whether investors will want to take profits out of this latest surge, or dig in and set 6000 as a base for further growth in 2011,” Ben Critchley, a sales trader at IG Index, said.
The biggest stock market gains Wednesday were recorded in China, where the Shanghai Composite Index rose 0.7 percent to close at 2,751.53 and Hong Kong’s Hang Seng index climbed 1.5 percent to finish at 22,969.30.
Chinese stocks bounced back after two days of losses in reaction to news that authorities would raise a benchmark interest rate. Chinese officials are trying to keep a lid on rising inflation and the rate increase was the second such move in just over two months.
Analysts warned, however, that Wednesday’s rally could be short lived.
“It’s simply a technical rebound,” said Qian Qimin, an analyst at Shenyin & Wanguo Securities, in Shanghai. “Today’s rebound will not last.”
Elsewhere, Japan’s benchmark Nikkei 225 stock average rose 51.91 points, or 0.5 percent, to close at 10,344.54.
Activity in the currency markets was subdued though traders continued to keep a close watch on the dollar’s value against the yen. The Japanese currency has risen on 9 of the last 10 days against the dollar, to the chagrin of the country’s exporters — a higher yen makes it more difficult for them to compete in international markets.
Neil Mellor, senior currency strategist at Bank of New York Mellon, said drawing inferences from what is going on at this time of year is best avoided but added that the recent price action could be a taste of things to come.
“Should the yen’s value against the dollar continue on its recent tack, then the first 10 days of the New Year could well oblige the Japanese ministry of finance to instigate the first talking point of 2011,” Mr. Mellor said.
Last September, the Bank of Japan bought dollars and sold yen for the first time in six years in the hope of putting a ceiling, at the very least, on the yen appreciation. For the latest updates PRESS CTR + D or visit Stock Market news Today
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