World Stocks Have Yet to Succumb to Gravity

succumb-to-gravityWorld stocks’ are struggling to extend the near-50 percent gains seen since March 9 but they have yet to succumb to gravity despite a back up in government bond yields. Citigroup analysts reckon global equity markets can rally as long as Treasury yields stay below 5-6 percent but it might be the speed of yield moves that determines whether equities get rattled or keep looking past higher borrowing costs to the recovery story. A rise in defensive sectors like pharmaceuticals pushed the Dow and S&P 500 higher on Friday, while technology shares dragged on the Nasdaq after National Semiconductor’s NSM.N disappointing outlook. The Reuters/University of Michigan Surveys of Consumers showed consumers’ mood in June stood at its highest in nine months, but worries about inflation and labor market uncertainty persisted. We are going to need to see some of this data come along with where we are in prices, until then we are range bound. The Dow Jones industrial average .DJI gained 28 points, or 0.32 percent, to 8,799.78. The Standard & Poor’s 500 Index .SPX edged up 0.10 of a point, or 0.11 percent, to 946.21. The Nasdaq Composite Index .IXIC dropped 3.57 points, or 0.19 percent, to 1,858.80.

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