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Asian shares mirror Dow comeback, dollar steady

08 February 2018

A trader works on the floor of the New York Stock Exchange in New York Feb. 6, 2018.

ANALYST'S VIEW: "Risk sentiment continues to be wobbly in markets, with USA equities notching a loss at the close, while Brent prices fell sharply to $65 overnight", Mizuho Bank said in a daily commentary. The Dow Jones industrial average scored its biggest one-day percentage gain in... But the Dow is up 24 per cent in the past 12 months and the S&P 500 has gained 18 per cent.

"Volatility is back", said Jamie Cox of Harris Financial Group.

By the closing bell., the Dow had shed 0.1 per cent (19 points). Spot gold dropped 0.9 percent at $1,313.67 per ounce. The S&P 500 rose 1.7% to 2,695, and the Nasdaq rose 2.1% to 7,115.

Wall Street stocks finished with solid gains on Tuesday after a rollercoaster session, winning back a good portion of the losses from the prior session's rout.

It's not just higher wages that scare investors.

The wild swing on Tuesday followed a steep sell-off which was considered a "flash crash" in the previous session.

The increase came on a day when stocks moved by more than 1,100 points.

The index settled 1,175.21 points, or 4.60 percent lower while the S&P 500 slumped 4.10 percent on Monday, both erasing 2018's gains.

Bond yields turned higher after a sharp drop Monday.

"We were all talking about this 10-per cent correction, I don't think anybody thought it would happen over three trading days".

German shares rose 0.6%, adding gains after news of a government coalition deal, with Social Democrats likely taking the key finance portfolio.

On Friday, Dow Jones and S&P 500 reported their worst weekly performance in two years.

The White House said in a statement that President Trump was focused on "our long-term economic fundamentals, which remain exceptionally strong". Instead, it was a healthy market correction that is welcomed and long overdue.

Analysts say that in the short term, investors should be prepared for choppier stock markets, but doubt whether there will be a prolonged period of selling.

The Dow and S&P 500 edged up in choppy trading on Wednesday afternoon, though energy shares dropped as oil prices fell 2 percent after US data fanned fears of oversupply. Those stemmed from the U.S.jobs report on Friday. Just this past year, the Dow has hit new milestones several times.

Market analysts attributed first half of 2017's bull market to Trump's election victory and his promises of a series of economic stimulus plan including relaxing regulations, cutting tax, and spending more on infrastructure.

By midday in Europe, indexes were also creeping upward, apparently buoyed by Wall Street's last minute rebound.

While the top equities stories for second half of 2017 were stronger-than-expected corporate earnings, US economic growth and global economy recovery, Trump continued to take credit for the market on the way up.

The slump began Friday as investors anxious that higher inflation and interest rates could derail a long-running rally.

Gold slipped as the USA dollar strengthened.

Elsewhere, oil extended declines after US explorers raised the number of rigs drilling for crude to the most since August.

Peter Costa, President of Empire Executions, Inc., said while the slide looked terrifying, the market has been waiting for some kind of correction for some time, and Monday's pullback was "perfectly fine".

Is the stock market really in turmoil?

The Nikkei 225 tumbled as much as 7.1 percent on Tuesday before regaining some lost ground to close 4.7 percent lower. On Tuesday it rallied another $4.12, or 11.6 percent, to $39.74.

Asian shares mirror Dow comeback, dollar steady