Equities rise after strong US data; yen firms on currency warnings

By Caroline Valetkevitch and Sinéad Carew

NEW YORK/LONDON, Dec 23 (Reuters) – Major stock indexes were up while Treasury yields were little changed on Tuesday after stronger-than-expected U.S. economic data, while the yen shot up after warnings from Tokyo on its readiness to support the battered currency.

The pan-European STOXX 600 index registered a record closing high on gains in the healthcare sector, after heavyweight Novo Nordisk secured U.S. approval of its weight-loss pill.

Silver hit a record high above $70 an ounce, while gold also touched a record.

Data showed the U.S. economy grew faster than expected in the third quarter, driven by robust consumer spending. Early estimates showed gross domestic product increased at a 4.3% annualized rate last quarter, far above economists’ forecast for a rise at a 3.3% pace, according to a Reuters poll.

“We’re still in this period of playing catch-up with economic data and GDP is dated… But it’s showing strength in the economy, and strength that’s above expectations,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

U.S. economic releases have been delayed by a record federal government shutdown.

On Wall Street at 2:49 p.m., the Dow Jones Industrial Average rose 102.88 points, or 0.21%, to 48,465.56, the S&P 500 rose 28.76 points, or 0.42%, to 6,907.14 and the Nasdaq Composite rose 113.51 points, or 0.48%, to 23,542.33.

MSCI’s gauge of stocks across the globe <.MIWD00000PUS>  rose 4.74 points, or 0.47%, to 1,020.23.

Earlier, the pan-European STOXX 600 <.STOXX> index had ended up 0.34%. 

Novo Nordisk’s U.S. listed shares were rallying more than 6% on Tuesday after the U.S. Food and Drug Administration approved its weight-loss pill, giving the Danish drugmaker a competitive edge in the fast-evolving obesity treatment market.

The yield on benchmark U.S. 10-year notes <US10YT=RR> gave up earlier gains and was flat compared with late Monday at 4.171%. The 2-year note <US2YT=RR> yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.1 basis points to 3.534%, from 3.503% late on Monday.

In currencies, the yen gained against the dollar as investors weighed the odds of an imminent intervention after  Finance Minister Satsuki Katayama said Japan has a free hand in dealing with excessive moves in the yen, the strongest warning so far about Tokyo’s readiness to intervene in the market to arrest sharp declines in the currency. The BOJ raised rates at its December policy meeting on Friday, as expected.

Against the Japanese yen <JPY=>, the dollar weakened 0.52% to 156.23.

The dollar index <=USD>, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.27% to 97.97. The euro <EUR=> was up 0.22% at $1.1786 and sterling <GBP=> strengthened 0.22% to $1.3491.

In precious metals, silver extended its record rally and hit the key $70 an ounce mark, while gold and platinum also touched historic highs.

Spot silver was up 3.38% at $71.31 while spot gold <XAU=> rose 1.03% to $4,491.29 an ounce and spot platinum was up about 6.4% at $2,255.40.

In energy markets, oil prices ended Tuesday’s session higher as potential sales of Venezuelan crude seized by the United States weighed and investors assessed stronger-than-expected U.S. economic data.

U.S. crude settled up 0.64%, or 37 cents at $58.38 a barrel while Brent settled at $62.38 per barrel, up 0.5%, or 31 cents  on the day.

(Reporting by Caroline Valetkevitch and Dhara Ranasinghe in London; additional reporting by Rae Wee in Singapore; Editing by Tomasz Janowski, Philippa Fletcher and Chizu Nomiyama )