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GLOBAL MARKETS-Shares edge up as cyclical stocks provide support; yields rise

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Saqib Iqbal Ahmed
·3 min read
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* Wall Street supported by rise in cyclical stocks

* Longer-term yields climb, 30-year TIPS yield goes positive

* Gold hits a seven-month low, oil prices slip

* Bitcoin hits $1 trillion market cap(Updates prices)

By Saqib Iqbal Ahmed

NEW YORK, Feb 19 (Reuters) - A gauge of global equitymarkets snapped a 3-day losing streak to edge higher on Fridayas investors sold technology shares and rotated intoeconomically-sensitive cyclical stocks in anticipation the U.S.economy will boom on pent-up demand once the coronaviruspandemic is subdued.

Oil prices fell from recent highs as Texas energy companiesbegan preparations to restart oil and gas fields shuttered byfreezing weather, while the U.S. Treasury yields climbed.

The MSCI's global stock index was up 0.24%at 680.3, after losing ground for three consecutive sessions.

On Wall Street, stocks steadied as cyclical sectors edgedhigher while tech names, which had started the session modestlystronger, reversed course to extend their recent decline.

A battle continues between tech-led growth stocks andcyclicals, companies that are heavily affected by economicconditions, said Tim Ghriskey, chief investment strategist atInverness Counsel in New York.

"When the economy is roaring, they're roaring. When theeconomy is weakening, they're weakening," Ghriskey said. "Theeconomy will roar, at least for a period of time. There’s hugepent-up demand, whether just for travel or going back to work."

The Dow Jones Industrial Average rose 50.82 points,or 0.16%, to 31,544.16, the S&P 500 lost 1.39 points, or0.04%, to 3,912.58 and the Nasdaq Composite added 22.82points, or 0.16%, to 13,888.18.

The S&P 500 technology and communication servicessectors fell, while financials, industrials, energy and materials rose more than1%.

European shares edged higher on Friday as an upbeat earningsreport from Hermes boosted confidence in a broadereconomic recovery. The pan-European STOXX 600 indexclosed up 0.53%.

U.S. Treasury yields on the longer end of the curve rose tonew one-year highs on Friday as improved risk appetite boostedWall Street, while the yield on 30-year inflation-protectedsecurities (TIPS) turned positive for the first time since June.

Core bond yields have pushed higher globally, led by theso-called reflation trade, where investors wager on a pick-up ingrowth and inflation. Growing momentum for coronavirus vaccineprograms and hopes of massive fiscal spending under U.S.President Joe Biden have spurred reflation trades.

The benchmark 10-year yield was last up 5.6basis points at 1.3448%, its highest level in about a year.

Oil prices retreated from recent highs for a second day onFriday as Texas energy companies began preparations to restartoil and gas fields shuttered by freezing weather.

Unusually cold weather in Texas and the Plains statescurtailed up to 4 million barrels per day (bpd) of crude oilproduction and 21 billion cubic feet of natural gas, analystsestimated.

Brent crude futures settled at $62.91 a barrel, down$1.02 or 1.6%, while U.S. crude oil futures settled at$59.24 a barrel, down $1.28, or 2.1%.

Copper jumped to its highest in more than nine years onFriday and towards a third straight weekly gain as tightsupplies and bullish sentiment towards base metals continuedafter the Chinese New Year.

Spot gold XAU= was down 0.25% at $1,779.96 an ounce.

The dollar lost ground on Friday, extending Thursday'sdecline as improved risk appetite sapped demand for thesafe-haven currency and drew buyers to riskier, higher-yieldingcurrencies. The dollar index was off 0.245%.

Bitcoin hit yet another record high on Friday, hitting amarket capitalization of $1 trillion, blithely shrugging offanalyst warnings that it is an "economic side show" and a poorhedge against a fall in stock prices.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by HerbLashEditing by Nick Zieminski)