U.S. Stocks, Bonds Refocus on Fed as Effects of China Move Ease

Investors in U.S. stocks and bonds refocused attention on the economy and the outlook for higher interest rates, as the financial turmoil triggered by China’s currency devaluation dissipated.

Treasuries fluctuated with equities amid factory data that added to signs of a strengthening U.S. economy that may prompt an increase in the Federal Reserve’s target interest rate as soon as next month. The effects of China’s devaluation lingered in emerging markets, where currencies from Malaysia to Russia weakened.

The Standard & Poor’s 500 Index added 0.1 percent at 12:05 p.m. in New York, headed for a 0.2 percent weekly gain. The yield on 10-year Treasury notes held near 2.19 percent after data showed a rise in wholesale prices and a pickup in industrial production. Oil pared its seventh weekly decline amid signs a global glut will be prolonged.

China’s yuan halted a three-day slide after the central bank raised its reference rate for the first time since Tuesday’s devaluation and said it will intervene to prevent excessive swings. The onshore spot rate was little changed at 6.3912 per dollar, after falling almost 3 percent this week.

Source : Bloomberg