GLOBAL MARKETS-U.S. stocks rise after Powell remarks; yields slip

BY Reuters | ECONOMIC | 06/22/22 11:45 AM EDT

* U.S. stocks higher after Powell remarks

* Oil prices fall

* Dollar slips (Updates to early U.S. markets activity, previous LONDON)

By Caroline Valetkevitch

NEW YORK, June 22 (Reuters) - Major U.S. stock indexes rose on Wednesday after Federal Reserve Chair Jerome Powell said the U.S. central bank is "strongly committed" to bringing down inflation, while benchmark Treasury yields eased.

Stocks turned positive following the comments by Powell in testimony to the U.S. Senate Banking Committee. The U.S. dollar slipped and the dollar index fell 0.431%.

"The market is reading it favorably. ... He's strongly committed to attacking inflation," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "He's sensitive that higher rates are going to hurt parts of the economy, but it's needed to create price stability."

The Fed recently raised its benchmark overnight interest rate by three-quarters of a percentage point - its biggest hike since 1994.

Nasdaq led gains on Wall Street.

The Dow Jones Industrial Average rose 31.4 points, or 0.1%, to 30,561.65, the S&P 500 gained 10.22 points, or 0.27%, to 3,775.01 and the Nasdaq Composite added 72.36 points, or 0.65%, to 11,141.66.

The pan-European STOXX 600 index lost 0.67% and MSCI's gauge of stocks across the globe shed 0.22%. Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan slumped 2.3% to close to a five-week low.

Investors are continuing to assess how worried they need to be about central banks potentially pushing the world economy into recession as they attempt to curb inflation with interest rate increases.

Minutes from the Bank of Japan's April policy meeting released Wednesday showed the central bank's concerns over the impact the plummeting currency could have on the country's business environment.

The Japanese yen strengthened 0.53% to 135.89 per dollar.

In Treasuries, benchmark 10-year yields were at 3.151% after reaching 3.498% on June 14, the highest since April 2011.

In commodities, U.S. crude recently fell 4.56% to $104.53 per barrel and Brent was at $109.76, down 4.27% on the day.

Investors digested news of a plan by U.S. President Joe Biden to cut fuel costs for drivers.

Spot gold added 0.4% to $1,839.71 an ounce.

(Reporting by Caroline Valetkevitch; Additional reporting by Marc Jones in London, Sam Byford in Tokyo, Shadia Nasralla in Bengaluru and Stephen Culp in New York; Editing by William Maclean and Will Dunham)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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