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U.S. stocks rose on Wednesday as Treasury yields fell after the Treasury Department announced anincreased buyback operation for longer-term debt.
TheDow Jones Industrial Averageadded 122 points, or 0.2%. TheS&P 500traded up 0.4%, while theNasdaq Compositeclimbed 0.1%.
Yields on the long end of the Treasury curve sank after the Treasury Department said Wednesday that it's going toat least doublethe size of its government debt repurchases. The increased buyback is aimed at the 10- to 30-year parts of the market. That'll include the 20-year.
The30-year Treasurybond yield — whichnotched a new 19-year highof above 5.33% in the prior trading day — declined almost 9 basis points to 5.196%. The10-year Treasurynote yield shed 6 basis points to 4.647%.
Modernaalmost doubled, soaring more than 90% and heading for its best day on record after an experimental skin cancer vaccine developed withMerckshowed success in a late-stage trial. Merck shares jumped more than 7%, supporting the Dow.
Shares ofMarvell Technologygained more than 12% after announcing an agreement with Google related to its tensor processing units and issuing Alphabet a warrant to buy as much as almost 59 million shares of Marvell common stock.
The major U.S. stock averages fell on Tuesday, with the S&P 500 posting its third consecutive loss, as sovereign bond yields around the globe hit multi-year highs. Along with the 30-year Treasury yield's fresh 19-year high, Japan's 10-year bond yield reached its highest level in three decades. Rates on France's 30-year bond reached the highest going back to 2008. The German 30-year bund yield hit its highest point since 2011.
Still, "the economy is strong enough," Adam Parker, founder and CEO at Trivariate Research, told CNBC's "Closing Bell"on Tuesday. "I think the earnings and cash flows from these big companies are strong enough that they'll power through any kind of scare that happens around this."
The latest Federal Open Market Committee meeting minutes are set to release Wednesday afternoon. Investors will likely take a keen eye to the minutes, given the sharp divisions within the central bank. Atthe July meeting, there were three dissenters voting to hike rates, a division that investors will seek greater detail on.
The three major averages began Wednesday's session in the green.
The Dow Jones Industrial Average gained 230 points, or 0.4%, just after 9:30 a.m. ET. The S&P 500 advanced 0.4%, along with the Nasdaq Composite.
Treasury announces upscaled buyback operation for longer-term debt
The Treasury Department on Wednesday said it will more than double the size of its government debt repurchases, sending yields sharply lower.
With fixed income markets under pressure and yields surging to levels not seen in nearly 20 years, the announcement targets a sensitive part of the Treasury market.
Under the accelerated buyback, Treasury will target the 10- to 20- year and 20- to 30-year portion of the market, which has seen a buyers' strike since late June. The government will "at least double" the maximum size of its buyback operations, from $2 billion to "at least" $4 billion, according to an announcement from the department.
Yields cratered following the announcement.Read more.
Morgan Stanley upgrades Honeywell Aerospace
Honeywell Aerospaceis looking very cheap, so it's a good time to scoop up its shares, according to Morgan Stanley.
The investment bank upgraded the aerospace name to overweight from equal weight. It has a price target of $205 on shares, implying nearly 28% upside from Tuesday's close.
"Our fundamental concerns have not disappeared: HONA screens toward the lower end of peers on revenue and EBIT growth, margin expansion is limited, [free cash flow] conversion trails peers, and lower next-generation Commercial [original equipment] content could constrain the long-term aftermarket opportunity," analyst Kristine Liwag said in a note to clients. "We believe the valuation now more than compensates for these risks. HONA warrants a discount to peers, in our view – but not the ~35% discount reflected today."
Shares of Honeywell Aerospace have fallen roughly 24% in the past month. The company was spun out from Honeywell in late June, as supply chain issues have stymied its operations.
CNBC Pro subscribers can read morehere.
Target, Estee Lauder and Analog Devices among the names making moves before the bell
Check out the companies making the biggest moves premarket:
Moderna soars 60% on new cancer vaccine results
Shares ofModernajumped 61% in premarket trading after an experimental cancer vaccine from the company andMerckshowedpositive resultsin its late-stage trial. Merck's stock moved 7% higher.
The mRNA-based shot used in combination with Merck's immunotherapy Keytruda met key goals in the trial with more than 1,100 patients with higher-risk or advanced melanoma whose detectable cancer had been completely removed through surgery.
Moderna and Merck plan to present the data at an upcoming meeting, but it is unclear when they play to submit applications for U.S. approval.
— Annika Kim Constantino and Michelle Fox
Lowe'sshares were down nearly 2% after the company issued a lackluster full-year revenue guidance and earnings guidance. Results for the second quarter were also mixed.
