U.S. stocks advance on data, Greek hopes; bund yields, euro rise

Wed Jun 3, 2015 4:28pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - Wall Street stocks rose modestly on Wednesday on hopes for an imminent Greek debt agreement and after data pointed to renewed life in the U.S. economy, while German debt yields climbed after comments from European Central Bank President Mario Draghi.

Greece's international creditors signaled on Wednesday they were ready to compromise to avert a default even as Athens warned it might skip an IMF loan repayment due this week.

German 10-year bond yields moved as high as 0.887 percent, a day after their biggest jump in nearly three years, after the ECB raised its inflation forecast for 2015. Draghi said the central bank saw no reason to adjust its monetary policy stance after a recent rise in bond yields in Europe.

In tandem with higher European yields, ten year U.S. Treasury yields US10YT=RR hit their highest since November at 2.3696 percent.

U.S. stocks ended slightly higher, partly lifted by data showing private employers picked up hiring in May, while the rise in bond yields helped lift financial shares. The report comes ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday.

"The biggest positive about the bond market weakness is that yields going higher is a net positive for all of the financials. Higher yields on fixed income translate into higher rates and that increases the net interest margin for financials," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The U.S. dollar's recent woes continued, spurred by better-than-expected inflation figures in the euro zone that also battered sovereign debt. It marks the second such jump in both the euro and euro zone sovereign yields in the last six weeks.

The greenback .DXY fell 0.53 percent against a basket of major currencies.   Continued...

A Wall Street sign is pictured in front of the New York Stock Exchange, open during Winter Storm Juno, in the Manhattan borough of New York January 27, 2015.   REUTERS/Carlo Allegri