Slipping US bond yields gave equity markets some respite
New York (AFP) - Global stocks finished mixed Tuesday following a meandering session amid lingering worries over higher interest rates as the IMF cut its global growth forecast.
Investors have been nervous since the yield on 10-year US Treasury bonds surged above 3.0 percent. The advance followed a stream of strong US economic data that was seen as boosting the likelihood that the Federal Reserve will persist in raising interest rates.
Yields continued higher early Tuesday but reversed and ended down at 3.21 percent.
Earlier, the Italian government appeared to have some success in talking yields down, with Finance Minister Giovanni Tria saying that fears over his country’s financial health – and the consequent spike in borrowing costs for Rome – did not fairly reflect the situation in the eurozone’s third largest economy.
Italian bond yields also rose early in the session before pulling back.
Bourses in Paris, Frankfurt and Paris all edged higher.
US stocks were mixed, with the Nasdaq scraping a modest gain, while the Dow and S&P 500 dipped.
“The broader market seemed reluctant to make a decisive move in any direction, as the S&P 500 index crossed back and forth across the unchanged line numerous times during the trading session,” said Briefing.com.
“An overnight spike in US Treasury yields spooked investors this morning.” Briefing.com added. “However, renewed buying interest drove prices up and yields down, which eased some of the early angst.”
Japan’s Nikkei slid 1.3 percent due to the stronger yen and worries about the Chinese economy.
- IMF cuts outlook -
The International Monetary Fund cut its outlook for global GDP by two-tenths to 3.7 percent for 2018 and 2019, citing an upswing in economic risks due to rising trade tensions and debt levels.
“Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded,” the IMF said.
The IMF predicted China’s economy would grow 6.2 percent next year, down from an early forecast of 6.4 percent, citing the “negative effect of recent tariff actions.”
China’s rate of growth could decline by as much as a full percentage point or more by 2019 if a “worst-case” scenario materializes, involving further tariffs, a commensurate Chinese counter-response and a collapse in confidence among businesses and markets, the IMF said.
American Airlines plunged 6.6 percent after disclosing that it canceled about 2,100 flights in September due to Hurricane Florence. Both Delta Air Lines and United Continental also shed more than two percent.
Starbucks jumped 2.1 percent after activist investor Bill Ackman announced he had built a stake in the coffee company.
- Key figures around 2100 GMT -
New York - Dow Jones: DOWN 0.2 percent at 26,430.57 (close)
New York - S&P 500: DOWN 0.1 percent at 2,880.34 (close)
New York - Nasdaq: UP less than 0.1 percent at 7,738.02 (close)
London - FTSE 100: UP 0.1 percent at 7,237.59 (close)
Paris - CAC 40: UP 0.4 percent at 5,318.55 (close)
Frankfurt - DAX 30: UP 0.3 percent at 11,977.22 (close)
EURO STOXX 50: UP 0.4 percent at 3,321.79 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 26,172.91 (close)
Shanghai - Composite: UP 0.2 percent at 2,721.01 (close)
Tokyo - Nikkei 225: DOWN 1.3 percent at 23,469.39 (close)
Euro/dollar: UP at $1.1494 from $1.1492 at 2100 GMT
Pound/dollar: UP at $1.3144 from $1.3090
Dollar/yen: DOWN at 112.95 from 113.23 yen
Oil - Brent Crude: UP $1.09 at $85.00 per barrel
Oil - West Texas Intermediate: UP 67 cents at $74.96 per barrel