(Updates to afternoon trading after Yellen comments)
* Yellen signals rate hike this month; Wall St flat
* U.S. yields flat, dollar down
* Oil rebounds from recent weakness, remains range bound
By Sinead Carew
NEW YORK, March 3 U.S. Treasury yields hit
session highs before flattening while stocks were largely
unchanged on Friday after Federal Reserve Chair Janet Yellen
said the Fed is set to raise its benchmark interest rate this
month as long as economic data on jobs and inflation holds up.
Yellen was widely expected to signal for a rate hike after a
week of hawkish comments from several Federal Reserve officials.
After her comment, the implied probability of a
March rate hike surged to about 82 percent from 77.5 percent the
previous day, according to CME Group's FedWatch tool.
The dollar index, which measures the greenback's
strength against a basket of six major currencies, fell to a
session low of 101.66 before clawing back some losses. It was
last down 0.3 percent. The index was still on track for its
fourth straight weekly gain.
“Equities can handle hikes when it’s in the face of stronger
growth. It’s the investment-grade corporate market and Treasury
market that will have to reckon with hikes more than equities
will,” Brian Jacobsen, Chief Portfolio Strategist at Wells Fargo
Funds Management in Menomonee Falls, Wisconsin.
Before flattening out, U.S. 7-year Treasury yields briefly
hit their highest point since Dec. 29, rising to 2.354 percent
while U.S. 5-year Treasury yields hit the highest since Dec. 28,
2.061 percent, before easing.
At 1:26 p.m. ET, the Dow Jones Industrial Average was
down 23.31 points, or 0.11 percent, to 20,979.66, the S&P 500
had lost 3.59 points, or 0.15 percent, to 2,378.33 and
the Nasdaq Composite had dropped 5.87 points, or 0.10
percent, to 5,855.36.
The MSCI global stock index was down 0.2
Oil prices rose as the weaker dollar encouraged buying,
though gains were capped by unchanged Russian output for
February, a sign of its weak compliance with a global deal to
Benchmark Brent crude futures were up 0.9 percent at
$55.57 a barrel after closing down 2.3 percent in the previous
session. WTI futures gained 1 percent, to $53.14.
The Mexican peso rallied to its strongest level since the
day following the U.S. presidential election after U.S.
Secretary of Commerce Wilbur Ross said a new mechanism should be
created to stabilize the exchange rate.
(Additional reporting by Rodrigo Campos, Saqib Iqbal Ahmed and
Dion Rabouin in New York, Vikram Subhedar in London, Dhara
Ranasighe and Wayne Cole in SYDNEY; Editing by Bernadette Baum
and Nick Zieminski)