Though markets were mixed last week, the strong February rebound had major indexes well into positive territory for the year to date and many at or near all-time highs. The yield on the benchmark tenyear U.S. Treasury note fell slightly during the week, while bonds from a variety of European governments — including Germany, Italy, Spain, Portugal and Ireland — all touched new historical lows. Oil prices continued to be volatile.
Stock markets extended their gains into the third week of February. In the U.S., a holiday-shortened trading week produced solid progress for most equity indices; both the DJIA and S&P 500 established new records, while the Nasdaq closed just 1.9% short of its March 2000 peak. European and Asian bourses posted similar results to establish new multi-year highs. Yield on the benchmark ten-year U.S. Treasury was volatile, but ultimately higher; it’s risen nearly 50 bps over the past three weeks. Oil prices remained under pressure and finished lower.
The February rebound in domestic equity markets continued, driving the S&P 500 a new all-time high and the DJIA above 18,000 for the first time in 2015. The Russell 2000 index of small-cap stocks also established a new high-water mark, while the Nasdaq reached levels not seen since 2000. The Treasuries selloff persisted, with yield on the benchmark ten-year closing the week above 2%.
After an abysmal January, U.S. equity markets began February with a surge. Even after a Greek downgrade sparked a modest Friday selloff, both the S&P 500 and DJIA gained more than 3% during the week. A four-day Treasury selloff sent yield on the benchmark ten-year to 1.94%. Oil prices posted their biggest one-week gain since 2011, with the U.S. benchmark closing around $52/barrel.
Markets finished off a difficult month on a sour note, with each of the big-three indexes returning to their losing ways for the week. For January, the DJIA and S&P 500 each shed more than 4%, while the Nasdaq loss was closer to 3%; European equities, in contrast, delivered the best monthly performance in more than three years surging nearly 7%. Yield on the benchmark ten-year Treasury fell to as low as 1.65%, the lowest level since May 2013. Crude oil prices climbed after the number of U.S. rigs in operation were reported lower.