Rising bond yields propelled the Dow Jones toward a spectacular advance on Monday, but economist David Rosenberg says he’s not convinced. | Source: AP Photo / Richard Drew
By CCN Markets: Rising bond yields propelled the Dow Jones toward a spectacular advance on Monday, as the US stock market continued to claw itself out of the cavernous hole it dug for itself earlier in the month.
However, one so-called perma-bear claims that the market is still flashing a dangerous warning sign.
Dow Races Toward Fabulous Rally
All of Wall Street’s major indices secured mammoth gains at the opening bell. As of 9:39 am ET, The Dow Jones Industrial Average had gained 291.45 points, or 1.13%, to jump to 26,177.46.
The S&P 500 rallied 33.55 points, or 1.16%, to 2,922.23. Ten of 11 primary sectors recorded gains, with utilities dipping less than 0.1%.
The Nasdaq led the pack with a 1.5% surge to 8,014.13.
Bond Yields Spike, Sending the Dow Jones Higher
Stock prices rose in tandem with US Treasury bond yields, assuaging fears that the bond market was portending a recession.
The yield on the 30-year Treasury note jumped to 2.1%, just days after sliding below 2% for the first time ever. Bond yields rise as prices fall, indicating that investors are exiting these low-risk assets for more volatile investments.
The main yield curve – the difference between the yield on the 10-year and 2-year Treasury bonds –