Equities slide on FED, China worries
Stocks hit turbulence this week after major indexes posted a series of record highs. Investors generally remain upbeat about the outlook for share prices given the rapid pace of earnings growth. But some have become cautious, concerned that rising coronavirus cases will dent the global economic recovery while the Federal Reserve gears up to rein in its huge bond-buying program.
The S&P 500 ended Thursday up 5.53 points, or 0.13%, to 4405.80. The Dow Jones Industrial Average fell 66.57 points, or 0.19%, to 34894.12. The Nasdaq Composite rose 15.88 points, or 0.11%, to 14541.79.
Treasuries ended Thursday mixed, with the long end higher after paring gains, amid growth concerns stoked by virus developments. Yields were near session lows when U.S. trading began, along with U.S. equity and commodity benchmarks. They partially rebounded as stocks stabilized, even as the commodity rout deepened.
European stocks slumped after the Federal Reserve signalled a tapering of stimulus starting this year and worries about China’s crackdown sparked a selloff in luxury shares.
Stoxx 600 Europe Index gained 0.11%, DAX dropped by 1.25%, and CAC 40 lost 2.43%, while FTSE 100 fell by 1.54%.
German benchmark yields closed the session above the ECB’s deposit rate for a second week. Bunds trimmed haven-led gains as euro-area equities rebounded from session lows supported by a recovery in metals and autos stocks.
Asian stocks fell Friday as the fast-spreading delta virus strain stoked concerns about economic growth and China’s regulatory curbs hurt sentiment.
MSCI Inc.’s Asia-Pacific gauge was at the lowest since around December. Shares slid in China and Hong Kong was poised for a bear market as Beijing cracks down on private industry.
Oil prices steadied on Friday, clambering away from three-month lows, but they were still on track for a weekly loss of more than 5% as new lockdowns in countries facing surging cases of the COVID-19 Delta variant dampened the outlook for fuel demand.
Broader investor risk aversion also weighed on oil with the U.S. dollar jumping to a nine-month high on signs the U.S. Federal Reserve is considering reducing stimulus this year.
Brent crude futures price was $66.45 a barrel on Thursday, down 2.61%. U.S. West Texas Intermediate (WTI) crude futures stood at $63.69 down 2.70%.