Wall Street closes its doors, European stocks end up little changed
- Wall Street Cancels Initial Gains, But Holds Near Recent Highs
- U.S. Treasury yields tumbled after heavy auction for 30-year bonds
- The dollar is stable, the euro increases as the ECB cuts its bond purchases
- Oil tumbles on China’s state reserve plan
WASHINGTON / LONDON, Sept. 9 (Reuters) – European stocks cut losses and Wall Street reversed earlier gains on Thursday as investors weighed in on uncertainty over central bank cuts and economic recovery due to the variant of the Delta coronavirus as well as strong weekly unemployment claims data in the United States.
The main US indices ended up weaker but remained close to their all-time highs.
The Dow Jones Industrial Average (.DJI) fell 0.43% to end at 34,879.38 points. The S&P 500 (.SPX) lost 0.46% to 4,493.28. The Nasdaq Composite (.IXIC) fell 0.25% to 15,248.25.
The voice of Federal Reserve Governor Michelle Bowman joined a growing number of policymakers on Wednesday who say August’s weak jobs report is unlikely to reverse the central bank’s plan to cut its $ 120 billion monthly bond purchases later this year. Read more
Earlier today, U.S. data showed Americans filing new jobless claims fell to the lowest number in nearly 18 months last week, offering more evidence that job growth has was held back by labor shortages rather than a cooling in demand for workers. The data fueled expectations that the Fed could start to reduce its economic support quickly. Read more
After losing up to 0.9% in morning trading, the pan-European STOXX 600 (.STOXX) index ended virtually unchanged around 467.57 points. The index had lost 1.5% in the past two days amid fears of a more hawkish-than-expected ECB.
“We are seeing modest weakness mainly because the market is in a state of flux. There is no real clarity on when we will start to see the Fed and the ECB start to withdraw stimulus measures,” Edward said. Moya, Senior Market Analyst at OANDA. At New York.
“Wall Street is still bullish. You’re going to have a slow Fed when it comes to cutting and hikes in interest rates. We’ll see a huge amount of accommodation to pump this economy up.”
Eurozone bond yields fell as the European Central Bank took its first interim step by withdrawing the COVID-era stimulus measures. Southern Europe led to lower yields on eurozone sovereign bonds.
The euro appreciated 0.13% against the dollar, its first gain in four sessions, while French 10-year rates turned negative.
Longer-term U.S. Treasury yields fell after a strong 30-year bond auction closed $ 120 billion in coupon offerings this week.
Instead of hinting at a potential end date for her pandemic-era purchasing program, ECB President Christine Lagarde channeled the mind of former British Prime Minister Margaret Thatcher by saying: ” The lady does not diminish “.
The German 10-year yield, the block’s benchmark, fell.
MSCI’s benchmark for global equity markets (.MIWD00000PUS) fell 0.42%. Emerging markets equities (.MSCIEF) fell 1.03%.
The UK’s FTSE 100 (.FTSE) fell 1% with low-cost airline easyJet (EZJ.L) tumbling more than 10% as it called on shareholders for $ 1.2 billion pounds ($ 1.7 billion). [nL8N2QB15H]
The largest MSCI Asia-Pacific stock index (.MIAP00000PUS) ended down 1%, its worst daily performance since August 19, when markets worried about the Fed’s cut to its program massive asset purchase.
Chinese tech giants Tencent Holdings Inc (0700.HK), NetEase Inc (9999.HK) and Alibaba Group Holding Ltd (9988.HK) fell 8.5%, 11% and 6% respectively after chiefs online gambling authorities were summoned by authorities to verify they were sticking to tough new rules for the industry. Read more
“Global history seems sweet and it is being affected by the Delta variant as well as concern that the Fed continues to head for a decrease,” said Rob Carnell, head of research for Asia at ING. “It’s a disturbing combination of things.”
Stocks in Hong Kong (.HSI), where many major Chinese companies are also listed, fell 2.3%.
News that Chinese authorities had told gaming companies to stop focusing “only on money” and “only on traffic” had hurt companies with large gaming operations. Tencent fell 8.5%, Bilibili (9626.HK) lost almost 9%, and NetEase fell 11%.
Evergrande (3333.HK), the nation’s most indebted real estate giant, has been hit by more turmoil.
Media reports that the company would suspend some interest payments on loans and that payments on its wealth management products caused its shares to fall by more than 10% at one point, although they recovered near the bottom. half of the decline following news that some creditors had agreed to extend loan payments. Read more
Korea’s Kospi (.KS11) fell 1.5%, also under pressure from regulatory scrutiny from local tech players. Korean fintech names in the spotlight include Kakao Corp (035720.KS), which lost 7.2%, and Naver Corp (035720.KS), down 6.9%.
Australian stocks (.AXJO) lost nearly 2% after wage data showed a sharp decline in jobs during the first half of August.
The bullion was supported by a slight decline in the dollar. Spot gold prices rose 0.32% and futures contracts stabilized 0.4%, at $ 1,800 an ounce.
Oil prices have fallen due to China’s plan to exploit state reserves and a smaller-than-expected decline in supplies of U.S. crude.
In volatile trade, Brent futures fell $ 1.15, or 1.6%, to settle at $ 71.45 a barrel. U.S. West Texas Intermediate (WTI) crude fell $ 1.16, or 1.7%, to $ 68.14. This was the lowest settlement for the two since August 26.
($ 1 = 0.7246 pounds)
Additional reporting by Alun John in Hong Kong Editing by Carmel Crimmins, Nick Zieminski and Richard Chang
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