Economist's Insights

Today’s Trading Activity – S&P Reaches Another Record as Yields Pare Recent Rise

Sep 28, 2017

The three major U.S. equity indices all improved less than 0.2% but the S&P’s 0.12% gain was enough to push the index to its first record close in six days. Equities climbed back steadily to erase an opening drop but closed below their intraday peak reached shortly after lunch. Treasury yields had risen overnight heading into the European session but turned lower and lost momentum for the remainder of the day. The Dollar followed a path similar to U.S. yields and ended the day down 0.23% from Wednesday’s five-week high. Nine of the 11 S&P sectors improved but only 52% of the companies within the index closed higher. Those sectors that have been hit the hardest by the September snapback in yields, utilities and real estate, finished near the top of the index as yields fell. The bid for Treasurys strengthened steadily during the session and yields closed near their lows of the day. The 2-year yield closed down 2.0 bps at 1.45% while the 10-year yield lost just 0.2 bps to 2.31%. While the overnight momentum for higher yields had already faded before the announcement, strong demand metrics from the 7-year Treasury auction was credited with solidifying the reversal.