Dow Jumps 250 Points, Treasury Yields Decline as Investors Weigh Services Print

US benchmark stock indexes rose while government bond yields fell with the dollar after midday on Friday as investors weighed the services print for February.

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The Nasdaq Composite rose 1.4% to 11,621.4, with the S&P 500 up 1.1% to 4,026.2 and the Dow Jones Industrial Average 0.8% higher at 33,251.8. While consumer discretionary and communication services led the gainers, the consumer staples sector was the sole decliner intraday.

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The Institute for Supply Management’s US services index slipped to 55.1 from 55.2 in January, compared with expectations for a drop to 54.5 in a survey compiled by Bloomberg. The prices paid reading declined to 65.6 from 67.8 but at current levels still indicates substantial expansion.

The ISM reading follows the S&P measure that indicated the services sector expanded last month. The S&P Global US services index was revised higher to 50.6 in February from the 50.5 flash reading, compared with expectations for no revision in a survey compiled by Bloomberg. The February index is above the 46.8 print in January.

The US 10-year yield slumped 7.6 basis points to 4% but is still hovering close to its highest level in three months. The two-year yield slipped two basis points to 4.88%, trading around its strongest since 2007.

Atlanta Fed President Raphael Bostic stated on Thursday that while some Fed officials think a 50 basis points hike should be on the table in March, he thinks 25 basis points would be sufficient, according to a note from DA Davidson Friday. “Fed Governor Christopher Waller seemed to subsequently walk back these comments, stating that as long as inflation remains hot, rate increases will follow suit.”

The US Dollar index fell 0.3% to 104.71.

In company news, Costco Wholesale (COST) reported stronger-than-expected fiscal second-quarter earnings, though the warehouse chain’s revenue fell short of Wall Street’s estimates. Shares fell 3.3% intraday, the worst performer on the S&P 500.

Zscaler (ZS) also reported a beat on fiscal second-quarter earnings and sales but announced plans to reduce its workforce by 3%. Shares sank 9% intraday, the steepest decliner on the Nasdaq.

West Texas Intermediate crude oil rose 1.3% to $79.18 intraday.

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