NEW YORK/LONDON: Wall Street’s benchmark S&P 500 and the Nasdaq fell on Tuesday after the release of US economic data, while oil prices rose after China said it would scrap its COVID-19 quarantine rule for inbound travellers, which was seen as a major step in reopening its borders.
US Treasury yields rose after economic data that showed the advance goods trade deficit for November narrowed to $83.35 billion from the prior month’s $98.8 billion, while a separate report pointed to continued struggles for the housing market as home prices fell under rising mortgage rates.
Oil pared gains as some US energy facilities shut by winter storms began to restart after the commodity earlier hit a three-week high as China’s latest easing of COVID-19 restrictions spurred hopes of a recovery in demand.
On the first day of the holiday-shortened trading week, the rise in US rates put pressure on shares in the heavy-weight rate sensitive technology sector, according to Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
“It’s a lack of anybody with the conviction to step in and buy right now,” said O’Rourke, who said further pressure came from a sharp decline in shares of electric car maker Tesla Inc.
The Dow Jones Industrial Average rose 113.48 points, or 0.34%, to 33,317.41, the S&P 500 lost 5.67 points, or 0.15%, to 3,839.15 and the Nasdaq Composite dropped 90.23 points, or 0.86%, to 10,407.64. Markets in some regions including London, Dublin, Hong Kong and Australia remained shut after the Christmas holiday. The pan-European STOXX 600 index rose 0.19% and MSCI’s gauge of stocks across the globe gained 0.03%.
Emerging market stocks rose 0.27%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.53% higher, while Japan’s Nikkei rose 0.16%. Benchmark 10-year notes were up 7.5 basis points at 3.822%, from 3.747% on Friday. The 30-year bond was last up 9 basis points to yield 3.9116%, from 3.822%. The 2-year note was last up 6.4 basis points to yield 4.387%, from 4.323%.
The dollar pared losses on Tuesday after China said it would scrap its COVID-19 quarantine rule for inbound travellers, which also boosted risk-related currencies such as the Australian dollar. The dollar index, which measures the greenback against a basket of major currencies, was down 0.01%, with the euro up 0.14% at $1.065.
The Japanese yen weakened 0.37% versus the greenback at 133.36 per dollar, while Sterling was last trading at $1.2019, down 0.34% on the day. Commodity currencies such as the New Zealand and Australian dollars also moved higher.
In energy futures, US crude recently rose 0.98% to $80.34 per barrel and Brent was at $84.81, up 1.06% on the day. Gold prices rose as optimism surrounding decisions by top consumer China to ease COVID-19 restrictions weighed on the dollar, while resilient US yields cast a shadow over non-yielding bullion’s advance. Spot gold added 1.5% to $1,824.29 an ounce. US gold futures gained 1.09% to $1,815.50 an ounce.