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Equities have been mixed on speculation that this month’s rally has outpaced prospects of an economic rebound amid an increase in coronavirus cases around the world. Treasury bonds fell.
The S&P 500 index fluctuated as technology stocks outpaced the gains of industrial and energy companies. The Nasdaq 100 plunged 2.7% on Tuesday. Amazon.com Inc. sank as the online retail giant faced an antitrust lawsuit from the European Union, as Alibaba Group Holding Ltd.’s US filing receipts plummeted after China tightened control over giants of the Internet. Beyond Meat Inc. collapsed after the plant-based burger maker reported sales that were below Wall Street estimates. The Dow Jones Industrial Average outperformed as Boeing Co. rose to news that regulators may lift the 737 Max’s grounding as early as next week.
After all the excitement that has lifted global equities and sent havens into a tailspin, some analysts have said the moves may have gone too far. The coronavirus blast still has several hurdles to overcome, there is concern over fiscal stimuli, the handover of power to President-elect Joe Biden, and cases of the virus on the rise. The United States reported a record 142,907 new infections on Monday and Governor Phil Murphy said the jump in New Jersey cases was “devastating”. Despite the uncertainties, this month’s rally in the S&P 500 sent its valuations near the highest levels since the dot-com era.
“There is still a huge amount of uncertainty out there, and while stocks may continue to climb a wall of concern, the stock market is still subject to the rules of gravity,” said Jonathan Boyar, chief executive of Boyar Value Group. .
With the Nasdaq Composite Index lowered for a second consecutive session, a menacing double-top pattern has formed. This should put all eyes on the 50 and 100 day moving averages as the first and second support lines for the tech stocks indicator. Megacaps extended the slide that accompanied Monday’s rotation out of pandemic favorites and into value stocks, and potentially setting a test of the 11,000 level around the 100-day line.
Meanwhile, China has unveiled regulations to eradicate monopolistic practices in the internet sector, seeking to limit the growing influence of companies such as Alibaba and Tencent Holdings Ltd. Shares of the Asian nation landed about a week after the new financial sector restrictions that triggered the shock suspension of Ant Group Co.’s $ 35 billion initial public offering.
Traders also monitored a string of Federal Reserve speakers on Tuesday for clues about the policy after optimistic news about a coronavirus vaccine on Monday triggered a rebound in betting for central bank rate hikes starting in late 2023. Dallas Fed Bank President Robert Kaplan said “the jury came out in the fourth quarter due to the resurgence of the virus.”
These are some of the main moves in the markets:
Actions
The S&P 500 was down 0.1% at 2:03 pm New York time.
The Stoxx Europe 600 index increased by 0.9%.
The MSCI Asia Pacific index has changed little.
Currencies
The Bloomberg Dollar Spot Index fell 0.1 percent.
The euro rose 0.1% to $ 1,182.
The Japanese yen was slightly changed to 105.33 per dollar.
Bonds
The 10-year Treasury bond yield increased three basis points to 0.96 percent.
Germany’s 10-year yield increased by two basis points to -0.49 percent.
Britain’s 10-year yield was up three basis points to 0.401%.
Raw material
The Bloomberg Commodity Index gained 1.7%.
West Texas Intermediate crude rose 2.3% to $ 41.21 a barrel.
Gold strengthened 0.7 percent to $ 1,876.70 an ounce.
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