Wall Street sees green as US stocks open higher; banks, industrials post gains

Published on Jun 21, 2021 07:24 PM IST

The benchmark index was up 0.3% in the first few minutes of trading Monday. Banks and industrial companies were doing the best, while several big technology companies were falling.

A trader reacts while talking on his phone during a break outside of the New York Stock Exchange (NYSE) on Wall Street in New York City.(REUTERS)
A trader reacts while talking on his phone during a break outside of the New York Stock Exchange (NYSE) on Wall Street in New York City.(REUTERS)
AP |

Stocks are opening mostly higher on Wall Street, getting the week off to a positive start after the S&P 500 posted its biggest weekly decline since February.

The benchmark index was up 0.3% in the first few minutes of trading Monday. Banks and industrial companies were doing the best, while several big technology companies were falling.

That helped pull the tech-heavy Nasdaq composite down 0.4%. Investors will be keeping an eye on more data coming out on inflation this week, as well as earnings from Nike and FedEx. Bond prices fell. The yield on the 10-year Treasury note rose to 1.48%.

How world markets performed

World markets were mixed Monday after a sell-off Friday on Wall Street gave the S&P 500 its worst weekly loss since February.

Japan’s benchmark fell 3.3% but shares rose in London and Frankfurt. US futures were higher.

Investors are still thinking over the Federal Reserve’s signal that it may raise current ultra-low interest rates sooner than expected and slow its market-supporting bond purchases.

Part of the Fed’s mission is to keep prices under control. The fear is that burgeoning inflation may prompt central banks to dial back the lavish support that has lifted markets to new highs after they plunged at the onset of the coronavirus pandemic last year.

Until its latest policy meeting, last week, the Fed had indicated it viewed recent price hikes as transient and would let the recovering economy run hot. Now it's forecasting raising interest rates twice in 2023.

Asian markets opened mostly lower early Monday but the losses were contained.

In Europe, Germany's DAX gained 0.3% to 15,493.53 and the CAC 40 in Paris edged 0.1% higher, to 6,573.41. In London, the FTSE 100 inched up less than 0.1%, to 7,021.31. The future for the S&P 500 gained 0.4% while that for the Dow industrials climbed 0.5%.

In Asian trading, the Nikkei 225 gave up 953 points to 28,010.93 and the Kospi in Seoul lost 0.8% to 3,240.79. Hong Kong's Hang Seng index lost 1.1% to 28,489.00. Australia's S&P/ASX 200 declined 1.8% to 7,235.30.

The Shanghai Composite index edged 0.1% higher, to 3,529.18.

India’s Sensex gained 0.4% and Thailand’s benchmark fell 0.8%.

On Friday, the S&P 500 fell 1.3% to 4,166.45 in a broad retreat, while the Dow Jones Industrial Average lost 1.6%, to 33,290.08. The Nasdaq composite fell 0.9% to 14,030.38.

Markets were spooked after St. Louis Federal Reserve President James Bullard told CNBC he expects the first rate increase may come as soon as next year.

The Fed also has begun talks about slowing its $120 billion of monthly bond purchases, which are helping to keep mortgages and other longer-term borrowing cheap. But the Fed’s chair has said such a tapering is still likely a ways away.

Any pullback in Fed support would be a big change for markets, which have been feasting on ultra-low rates for more than a year.

The major US stock indexes remain relatively close to their record highs as the economy powers its way out of the recession caused by the pandemic. The S&P 500 is only about 2% below its all-time high set on Monday, and the Dow is within 5% of its record set last month.

The 10-year Treasury yield was steady at 1.43%.

In other trading, US benchmark crude oil rose 40 cents to $72.04 per barrel in electronic trading on the New York Mercantile Exchange. It gained 60 cents to $71.64 on Friday. Brent crude, the international standard, picked up 38 cents to $73.89 per barrel.

The US dollar was at 110.10 Japanese yen, down from 110.27 on Friday. The euro rose to $1.1898 from $1.1861.

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