* Dow hits 21K for first time, dollar index hits seven-week
* 2-year Treasury yields hit highest since December
* European stock markets climb, FTSE hits record high
(Updates after U.S. market open, changes byline, previous
By Sinead Carew
NEW YORK, March 1 Wall Street indexes rallied on
Wednesday, with the Dow hitting a record above 21,000 points,
while the dollar and U.S. Treasury yields jumped as investors
bet that a U.S. interest rate hike would come soon.
New York Fed President William Dudley - one of the most
influential U.S. central bankers, and usually considered a dove
- said late Tuesday that the case for tightening monetary policy
had become "a lot more compelling", while San Francisco Fed
President John Williams said he saw "no need to delay" raising
The comments overshadowed U.S. President Donald Trump's
Tuesday night speech to Congress and sent U.S. financial stocks
soaring, helping the Dow Jones Industrial Average top 21,000 for
the first time as banks' profits get a boost from higher
“Williams and Dudley are very strongly signaling that fact
that March is a live meeting, and that’s occurring against the
backdrop of consistently strong (economic) numbers,” said
Richard Franulovich, a senior currency strategist at Westpac
Banking Corporation in New York.
At 10:29 a.m. ET, the Dow was up 254.45 points, or
1.22 percent, to 21,066.69, the S&P 500 had gained 25.3
points, or 1.07 percent, to 2,388.94 and the Nasdaq Composite
had added 57.20 points, or 0.98 percent, to 5,882.64.
Gains in mining and bank stocks also took Britain's
blue-chip FTSE 100 index to an all-time high.
It last traded up 1.5 percent, in line with a rise
in the FTSEurofirst 300 index.
U.S. Treasury yields rose broadly with 2-year yields hitting
their highest in more than seven years on increased expectations
for a Fed rate hike in March.
Having priced in only around a 35-percent chance that the
Fed would move this month before the Fed comments, investors are
now pricing in around a 66.4-percent probability of a March
hike, according to CME Group's FedWatch tool.
Yields on the 2-year Treasury note rose to a high
of 1.308 percent, the highest point since August 2009. Benchmark
10-year notes fell 25/32 in price to yield 2.45
percent. It earlier rose to 2.471, the highest since Feb. 16.
The dollar index, which measures the greenback against a
basket of other major currencies, climbed 0.7 percent and
touched its highest level since Jan. 11.
French stocks were boosted after controversial right-wing
French presidential candidate Francois Fillon, vowed to stay in
the race. The decision could strengthen the favorite candidate -
centrist Emmanuel Macron - who, polls show, would beat far-right
anti-EU leader Marine Le Pen.
The decision helped French stocks, already doing well after
strong earnings reports, climb 2 percent.
The global MSCI ACWI index, was up 0.6
percent, erasing the previous three days' losses.
In his speech Tuesday, Trump pledged to overhaul the
immigration system, improve jobs and wages and deliver "massive"
tax relief to the middle class and tax cuts for companies, but
offered few clues on how this would be achieved.
In commodity markets, oil prices edged up as investors took
heart from strict OPEC compliance with its pledge to cut output,
though evidence of increasing U.S. production capped
The stronger dollar weighed on gold, which dropped
0.6 percent to 1,240.99 an ounce, extending Tuesday's drop.
(Additional reporting by Karen Brettell in New York, Helen
Reid, Jamie McGeever and Dhara Ranasinghe in London, and Nichola
Saminather in Singapore; Editing by Mark Trevelyan and Nick