WALL Street’s optimistic start to the New Year continued on Tuesday as prices for some stocks, oil and the dollar advanced, but investors dialled back risk-taking elsewhere as data showed US manufacturing slowed and COVID-19 spread.
The S&P 500 was flat Tuesday while the Dow Jones Industrial Average rose 0.59% to 36,799.65, a fresh record, as bank stocks surged with US Treasury yields.
At the same time, the Nasdaq Composite reversed Monday’s strong gains to fall more than 1.33%, with declines in shares of high-flyers Tesla Inc , Microsoft Corp and Apple Inc.
“While seats are filling up again on Wall Street, we think that market players will be slow to increase risk,” wrote Charlotte-based wealth management firm Horizon Investments chief investment officer, Scott Ladner in an email.
The mixed picture was underscored by US manufacturing activity: fresh data showed it had slowed in December amid cooling demand for goods, but supply constraints were starting to ease and a measure of prices paid for inputs by factories fell by the most in a decade, according to The Institute for Supply Management.
The US also set a global record of almost 1 million new coronavirus infections reported on Monday, according to a Reuters tally, nearly double the country’s peak of 505,109 hit just a week ago.
Global equities were up earlier on Tuesday. The Euro STOXX 600 gained 0.82% to hit a record of 494.02 points. Asian stocks also gained, with MSCI’s gauge of Asia Pacific stocks outside Japan up around 0.4%.
The US dollar rose against the Japanese yen to hit a five-year peak as investors anticipated the Omicron variant would not derail the global economy or delay the Federal Reserve’s expected rate hikes.
The dollar index rose 0.097%, with the euro down 0.11% to $1.1282.
US Treasury yields also rose as bond investors geared up for rate hikes from the Fed by mid-year to curb stubbornly high inflation.Oil prices rose again on Tuesday as OPEC+ agreed to stick to its planned increase in oil output for February, sources from the group told Reuters, because it expects the Omicron variant to have a short-lived impact on demand.
US crude rose 1.16% to $76.96 per barrel and Brent was at $79.95, up 1.23% on the day.
In a sign of investors hedging their bets, gold consolidated above the key $1,800 per ounce level on Tuesday, after a sharp retreat in the last session.
Spot gold added 0.8% to $1,814.43 an ounce. US gold futures gained 0.83% to $1,814.00 an ounce. — Jan 5, 2022
