Stocks start to fall after wholesale prices hike last month
Stocks opened lower on Wall Street again on Tuesday as traders took notice of the latest sign that inflation is still high. The S&P 500 Index fell 0.5% at the start. Tech companies posted some of the biggest losses, which helped push the Nasdaq down 0.8%. The Dow Jones Industrial Average has changed little. Treasury yields rose after the latest inflation report, which showed wholesale prices jumped a record 9.6% in November from a year earlier, more than expected. Federal Reserve policymakers began a two-day meeting on Tuesday in which they are expected to accelerate the withdrawal of economic stimulus measures.
THIS IS A CURRENT UPDATE. AP’s previous story follows below.
BANGKOK (AP) – Shares opened higher in Europe on Tuesday after Asian stocks followed Wall Street lower as investors awaited new data on US inflation and the results of a Federal Reserve meeting .
Benchmarks rose in Paris, London and Frankfurt, but fell in Hong Kong, Shanghai and Tokyo.
The Ministry of Labor’s producer price index for November is due on Tuesday. This shows the impact of inflation on business costs and is important given the Fed meeting on Tuesday and Wednesday. The US central bank may announce plans to speed up its schedule of cutting bond purchases aimed at keeping long-term interest rates low.
Markets have kept their cool despite warnings that the omicron variant of the coronavirus is spreading rapidly in Britain and some other regions.
In London, the FTSE 100 gained 0.6% to 7,274.71, while the German DAX gained 0.4% to 15,678.78. In Paris, the CAC 40 climbed 0.5% to 6,979.16. US futures also rose, with the contract for the S&P 500 and the Dow Jones up 0.3%.
Hong Kong’s benchmark slipped on Tuesday amid lingering concerns about real estate developers.
Shares of Shanghai-based Shimao Group Holdings fell 20% in Hong Kong amid concerns over its financial condition. China Evergrande Group shares lost 7%. Evergrande is one of the largest Chinese developers, with over $ 300 billion in debt.
Chinese leaders have pledged tax cuts and support for entrepreneurs to support plummeting economic growth as the country grapples with bankruptcies and defaults among real estate developers caused by a campaign to curb economic growth. increase in debt.
“Recent scrutiny has taken hold of Shimao Group Holdings, China’s 13th largest developer in terms of contract sales, over its liquidity position and debt service capacity. This could continue to put the real estate industry under scrutiny today, ”said Yeap Jun Rong of IG.
Another concern is the first reported case in China of the omicron variant of the coronavirus, Yeap added.
The Hong Kong Hang Seng slipped 1.3% to 23,635.95 and the Nikkei 225 in Tokyo fell 0.7% to 28,432.64. In Seoul, the Kospi fell 0.7% to 2,987.95.
The Shanghai Composite Index lost 0.6% to 3,661.53, while the Australian S & P / ASX 200 was virtually unchanged at 7,378.40.
On Monday, the S&P 500 fell 0.9% to 4,669.97, returning some of its gains after the benchmark hit an all-time high on Friday, ending Wall Street’s best week since February. The Dow Jones Industrial Average also fell 0.9% to 35,650.95. The high tech Nasdaq composite slipped 1.4% to 15,413.28.
The Russell 2000 was also down 1.4% to 2,180.50 as small company stocks outperformed the broader market, a sign that investors are concerned about economic growth.
The 10-year Treasury yield remained stable at 1.43% after falling to 1.41% on Monday 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%.
In other exchanges, benchmark US crude rose 37 cents to $ 71.66 per barrel in electronic trading on the New York Mercantile Exchange. It lost 38 cents to $ 71.29 on Monday.
Brent crude, the basis of international crude pricing, rose 42 cents to $ 74.79 per barrel.
The US dollar climbed to 113.68 Japanese yen from 113.57 on Monday night. The euro slipped to $ 1.1281 from $ 1.1285.