Stocks slide on ‘fragile’ mood; oil surges after steep loss – Metro US

Stocks slide on ‘fragile’ mood; oil surges after steep loss

FILE PHOTO: A Wall St. street sign is seen near
FILE PHOTO: A Wall St. street sign is seen near the NYSE in New YorkNYSE in New York

NEW YORK (Reuters) -Global equities dipped and the dollar hovered near four-month highs on Wednesday as concerns about extended economic lockdowns in Europe and the potential for higher taxes in the United States weighed on investor sentiment.

European shares closed near two-week lows, while oil prices surged after steep losses on Tuesday after one of the world’s largest container ships ran aground in the Suez Canal. Authorities were still trying to clear the ship from the vital shipping lane on Wednesday afternoon. [nL1N2LM051]

“The mood is fairly fragile as all the optimism that characterised the push higher over the past two or three weeks in shares is starting to bleed away on talk of a European third wave and extensions of pandemic lockdowns in Germany and France,” said Michael Hewson, chief market analyst at CMC Markets.

MSCI’s gauge of stocks across the globe shed 0.43% following steep declines in Asia and modest losses in Europe.

In afternoon trading on Wall Street, the Dow Jones Industrial Average rose 178.07 points, or 0.55%, to 32,601.22, the S&P 500 gained 5.67 points, or 0.14%, to 3,916.19 and the Nasdaq Composite dropped 138.92 points, or 1.05%, to 13,088.77.

The Ifo Institute said Germany’s extended lockdown is delaying a recovery. It cut its 2021 growth forecast for Europe’s biggest economy to 3.7% from 4.2% previously.

The IHS Markit euro zone flash composite purchasing management index rose to 52.5 in March from 48.8 in February in a surprise return to growth this month, as factories ramped up production at the fastest pace in over 23 years.

But the April numbers could be hit by the gathering pace of COVID-19 infections across Europe.

Benchmark 10-year notes last rose 6/32 in price to yield 1.6172%, from 1.638% late on Tuesday.

U.S. Treasury Secretary Janet Yellen said on Tuesday the American economy remains in crisis from the pandemic as she defended developing plans for future tax increases to pay for new public investments.

Federal Reserve Chair Jerome Powell told U.S. lawmakers that a coming round of post-pandemic price increases will not fuel a destructive breakout of persistent inflation.

The dollar index rose 0.113%, with the euro down 0.23% to $1.1822.

“We are definitely in that mode of a potential further reduction in risk, which would be supportive for the dollar,” said Derek Halpenny, head of research for global markets at MUFG.

“If you were to pick a top concern, then it would be the COVID situation, with new cases in emerging markets back to record highs and what’s happening in Europe. It does not tally with global optimism for synchronised global growth,” Halpenny added.

Bitcoin rose 2.5% as Tesla Incchief Elon Musk said the company’s electric vehicles can now bebought using bitcoin.

U.S. crude rose 5.44% to $60.90 per barrel and Brent was at $64.50, up 6.1% on the day.

Spot gold added 0.4% to $1,733.76 an ounce.

(Reporting by David Randall; Editing by Jonathan Oatis, Paul Simao and Sonya Hepinstall)

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