By Chibuike Oguh
New YORK (Reuters) – Global equities rose on Thursday after the U.S. House of Representatives passed a bill to raise the federal debt ceiling, while U.S. Treasury yields fell as data pointed to a cooling of the labor market that reduces the possibility of an interest rate hike by the Federal Reserve.
A bill that suspends the $31.4 trillion debt ceiling – and averts a catastrophic government default – scaled through the House on Wednesday after a majority of both Democrats and Republicans backed the measure despite opposition from hardline members of both parties. The U.S. Senate will begin considering the bill following its passage by the House.
“It seemed to be a well-televised deal and investors were not only conditioned by the debt dramas of the last decade and they knew this was coming. So it was like, buy the rumor, sell the news,” said David Klink, senior equity analyst at Huntington Private Bank.
The MSCI world equity index, which tracks shares in almost 50 countries, added 0.67%. The pan-European STOXX 600 index rose 0.8% after closing at a two-month low in the previous session.
On Wall Street, all three main indexes were trading higher led by stocks in technology, communication services, industrials and financials.
The Dow Jones Industrial Average rose 0.11% to 32,945.17, the S&P 500 gained 0.42% to 4,197.57 and the Nasdaq Composite added 0.52% to 13,002.94.
U.S. Treasury yields fell after Labor department data on Thursday showed U.S. worker productivity slumped in the first quarter, indicating an easing of the tight labor market and reducing the likelihood of a rate hike.
The yield on benchmark U.S. 10-year Treasury notes was down at 3.610%, while the yield on the 30-year Treasury bond was down at 3.8375%.
(Reporting by Chibuike Oguh in New York; Editing by Nick Zieminski)
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