Asian stocks advance after Wall St hits new record high
Tech and energy companies helped push stocks down on Wall Street on Monday, a pessimistic start to the week after the market’s best weekly gain since February.
The S&P 500 fell 0.9%, giving up some of its gains after the benchmark hit an all-time high on Friday. The Dow Jones Industrial Average fell 0.9%, while the highly technical Nasdaq composite slipped 1.4%.
Small company stocks have performed less well than the broader market, indicating that investors are concerned about economic growth. The Russell 2000 lost 1.4%.
The market pullback, with the S&P 500 just hitting its 67th all-time high this year, comes as investors look to the Federal Reserve’s latest economic policy and interest rate update on Wednesday. Markets expect the central bank to announce plans to speed up its schedule of curtailing bond purchases aimed at keeping long-term interest rates low.
“What Street isn’t sure is when the Fed will actually start raising interest rates,” said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 lost 43.05 points to 4,668.97. The Dow Jones slipped 320.04 points to 35,650.95. The Nasdaq lost 217.32 points to 15,413.28. The Russell 2000 gave up 31.31 points to 2,180.50.
Stocks mostly rose, despite a period of volatility in late November, as concerns about the rise of the omicron variant of the coronavirus initially disrupted markets. Some of those concerns eased over the past week amid encouraging signs that the variant may be less dangerous than the Delta.
But British Prime Minister Boris Johnson’s remarks over the weekend may have dampened the optimism of some traders. Johnson warned on Sunday that Britain was facing a “tidal wave” of infections from the omicron variant, and announced a huge increase in booster vaccinations to bolster defenses against it.
Several large pharmaceutical companies, including COVID-19 vaccine makers Moderna and Pfizer, were among the biggest winners of the S&P 500 on Monday. Moderna jumped 5.8% for the biggest gain in the index. Pfizer rose 4.6% following the announcement of the takeover of Arena Pharmaceuticals.
More than 60% of S&P 500 stocks fell, with tech stocks, banks and a mix of consumer spending-dependent companies weighing the index the most. Nvidia fell 6.8% for the biggest decline in the S&P 500. Bank of America fell 2.1% and General Motors slipped 6.5%.
Energy stocks suffered some of the heaviest losses, as the price of US crude oil fell 0.5%. Devon Energy slipped 5.4%.
Automakers and travel-related businesses also fell. Ford lost 4.8% and Carnival fell 4.9%.
Bond yields have fallen. The 10-year Treasury yield fell to 1.41% from 1.49% on Friday night. This has taken a toll on banks, which rely on higher bond yields to charge more lucrative interest on loans. Capital One fell 2.9%.
Harley-Davidson rose 4.7% after announcing it would go public with its electric motorcycle division through a blank check company, valuing the company that has been part of the motorcycle maker for 10 years to $ 1.77 billion.
In addition to the Federal Reserve’s policy statement, investors will be watching several economic reports this week to better understand economic growth as 2021 draws to a close and the world continues to try to shake off the impact of COVID. -19.
Wall Street will receive an inflation update on Tuesday when the Department of Labor releases its Producer Price Index for November, which shows the impact of inflation on costs for businesses. This report will be particularly important with the Fed meeting on Tuesday and Wednesday.
The persistent rise in inflation prompted the central bank to accelerate its plan to curtail bond purchases which have helped keep interest rates low. Investors will be listening to any statements that add details on the timing of this plan and any clues about the impact it may have on how quickly benchmark interest rates will be raised in 2022.
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