World Shares Mixed After Wall Street Rally; Gold Retreats
World shares were mixed on Tuesday after U.S. stocks advanced overnight. The price of gold retreated after surging to nearly $1,975 per ounce.
Investors are awaiting the outcome of a two-day policy meeting of the Federal Reserve that begins Tuesday. They’re also keeping an eye on corporate earnings and waiting for Congress to decide on more help for the American economy.
Germany’s DAX gained 0.5% to 12,904.76 and the CAC 40 in Paris edged 0.1% lower to 4,934.39. Britain’s FTSE 100 added 0.3% to 6,122.50. Wall Street looked set for a languid start, with the future for the Dow industrials virtually unchanged and the future for the S&P 500 up 1 point.
Investors are waiting to hear what the U.S. central bank says this week about the economy’s prospects and what it plans to do on interest rates, analysts said.
The closure of the U.S. Consulate in western China’s Chengdu, following the shutdown of China’s consulate in Houston, Texas, has highlighted antagonisms between Washington and Beijing that are adding to jitters at a time when the coronavirus pandemic appears to be regaining its grip in parts of Asia, including Hong Kong, Japan and Vietnam.
Such “acute geo-political uncertainties and socio-political strains all align with preference for a currency-like, safe-haven hard asset such as gold at the expense of the U.S. dollar,” Hayaki Narita of Mizuho Bank said in a commentary.
The price of gold jumped a fresh intraday high of $1,974.70 an ounce on Tuesday before retreating slightly. As of 0700 GMT it was trading at $1,909.00 down $22.00.
Gold usually tends to rise when worries about the economy are high.
Share prices ended mixed in Asia, with Tokyo’s Nikkei 225 index down 0.3% at 22,657.38. The Hang Seng in Hong Kong added 0.6% to 24,760.90. The Shanghai Composite index surged 0.7% to 3,227.96 and the S&P ASX/200 in Sydney lost 0.4% to 6,020.50.
South Korea’s Kospi picked up 1.8% to 2,256.99.
On Wall Street, the S&P 500 climbed 23.78 points overnight to 3,239.41. The Dow Jones Industrial Average rose 0.4% to 26,584.77. Heavy buying of technology shares helped push the Nasdaq composite 1.7% higher, to 10,536.27.
“Amid the lack of fresh leads for the market, investors appeared to have once again turned to the safe choice of tech stocks, ones regarded to better weather the COVID-19 pandemic,” Jingyi Pan of IG said in a commentary.
So far, profit reports have been better than Wall Street forecasts, though still far weaker than a year earlier because of the recession.
More than a third of the companies in the S&P 500 are scheduled to report how they fared from April through June, including some of the most influential companies such as Amazon, Apple, Facebook and Google’s parent company, Alphabet. Those four account for 16% of the S&P 500’s total value, which gives their movements significant influence on the index.
As extra pandemic unemployment benefits expire and U.S. businesses close down again to battle growing coronavirus counts, Democrats and Republicans still have much to negotiate over how best to support the economy.
The yield on the 10-year Treasury note ticked up to 0.61% from 0.60% late Monday.
Benchmark U.S. crude gave up 12 cents to $41.48 per barrel in electronic trading on the New York Mercantile Exchange. It gained 31 cents to settle at $41.60 per barrel on Monday.
Brent crude, the international standard, added 15 cents to $44.05 per barrel.
In currency dealings, the U.S. dollar strengthened to 105.65 Japanese yen from 105.40 yen late Monday. The euro slipped to $1.1709 from $1.1752.
