A wealthy Republican with no formal economics training, Jerome Powell (pictured) nonetheless won support from Democratic President Joe Biden to lead the Federal Reserve for a second term

New York (AFP) - Wall Street stocks finished mostly lower Monday while the dollar strengthened as investors digested US President Joe Biden’s decision to renominate Jerome Powell to lead the Federal Reserve.

Both the S&P 500 and Nasdaq surged above their closing records during the session before nose-diving later in the day. Only the Dow eked out a modest gain.

Earlier, European markets were mixed amid lingering worries over the economic hit from new Covid-19 restrictions in Austria and Germany.

Appointed by Biden’s Republican predecessor Donald Trump and taking office in 2018, Powell has led the central bank’s response to the massive pandemic downturn, which saw it slash its lending rate to zero and roll out trillions of dollars in liquidity.

Biden praised Powell for providing “steady leadership during an unprecedently challenging period, including the biggest downturn in modern history.”

But the appointment comes as higher consumer prices prompt debate over whether the Fed will be forced to raise interest rates more quickly than Powell has signaled.

The yield on the 10-year US Treasury note jumped, along with the dollar.

“Markets see Powell taking a little bit more of an aggressive stance towards withdrawing the Fed stimulus measure and ultimately moving and check inflation in the first part of next year,” said Christopher Vecchio, analyst at DailyFX.

Earlier, stock prices in Paris shed 0.1 percent and Frankfurt was down by 0.3 percent, while London closed 0.4 percent higher.

“There’s been so much anxiety about inflation and interest rates that investors are clearly apprehensive about over-committing,” said OANDA analyst Craig Erlam.

“And that anxiety has been exacerbated by the prospect of lockdowns in Europe, following Austria’s announcement on Friday,” he said.

On Friday, Austria surprised the markets by returning to a partial lockdown, not just for the unvaccinated as had been previously planned.

In Germany, outgoing Chancellor Angela Merkel warned that the country’s current Covid curbs – including barring the unvaccinated from certain public spaces – “are not enough.”

“The fear among market participant (is) that fresh lockdowns could be introduced in other parts of Europe, making the road to recovery from the pandemic even bumpier and raising concerns over the efficacy of the vaccines,” said ThinkMarkets analyst Fawad Razaqzada.

“So, there is now a real possibility we may see at least a short-term correction, as investors wake up to the risks facing the eurozone economy, after the major stock indices hit repeated all-time highs in recent weeks.”

- Key figures around 2210 GMT -

New York - Dow: UP less than 0.1 percent at 35,619.25 (close)

New York - S&P 500: DOWN 0.3 percent at 4,682.94 (close)

New York - Nasdaq: DOWN 1.3 percent at 15,854.76 (close)

London - FTSE 100: UP 0.4 percent 7,255.46 (close)

Frankfurt - DAX: DOWN 0.3 percent at 16,115.69 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,105.00 (close)

EURO STOXX 50: DOWN 0.4 percent at 4,338.69 (close)

Tokyo - Nikkei 225: UP 0.1 percent at 29,774.11 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 24,951.34 (close)

Shanghai - Composite: UP 0.6 percent at 3,582.08 (close)

Euro/dollar: DOWN at $1.1242 from $1.1290 at 2200 GMT

Euro/pound: DOWN at 83.88 pence from 83.92 pence

Pound/dollar: DOWN at $1.3395 from $1.3451

Dollar/yen: UP at 114.87 yen from 113.99 yen

Brent North Sea crude: UP 1.0 at $79.70 per barrel

West Texas Intermediate: UP 1.1 percent at $76.75 per barrel