NEW YORK, April 20 ― An index of stocks across the world yesterday posted its largest daily drop in almost four weeks after touching a record high as investors looked for earnings to justify the high valuations in equities.
The US dollar index touched a more than 6-week low and Treasury yields edged up after posting on Friday their largest weekly drop since June and oil prices slipped on concerns over rising coronavirus cases globally.
On Wall Street, indexes fell, with the Nasdaq being the biggest decliner.
The Dow Jones Industrial Average fell 123.04 points, or 0.36 per cent, to 34,077.63, the S&P 500 lost 22.21 points, or 0.53 per cent, to 4,163.26 and the Nasdaq Composite dropped 137.58 points, or 0.98 per cent, to 13,914.77.
“Wall Street could be in for a few choppy trading weeks as more of the same strong earnings beats becomes the theme,” Edward Moya, senior market analyst at OANDA, said in a note. “US stocks appear to have hit a top as all the good news from corporate America has been mostly priced in and as the pause in rising yields continues.”
MSCI's gauge of stocks across the globe shed 0.28 per cent, its largest daily drop since March 24.
The pan-European STOXX 600 index lost 0.07 per cent and Emerging market stocks lost 0.01 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.12 per cent higher. Nikkei futures lost 1.48 per cent.
The dollar fell against a basket of peers on the back of the sharp drop in Treasury yields last week.
“Indeed, the USD rally is all but distant memory by now and the currency's underperformance seems to reflect the apparent divergence in the outlook between the slumping UST yields and the rather perky bond yields elsewhere,” said Valentin Marinov, head of G10 FX research at Credit Agricole.
The dollar index fell 0.564 per cent, with the euro up 0.42 per cent to US$1.2033 (RM4.94).
The Japanese yen strengthened 0.55 per cent versus the greenback at 108.15 per dollar, while sterling was last trading at US$1.3987, up 1.14 per cent on the day, as traders bet on the British economy reopening amid the Covid-19 pandemic.
Treasury yields rose after last week's sharp drop.
“Yields are taking their cues from the equity markets,” said Jim Barnes, director of fixed income for Bryn Mawr Trust.
He and others said investors are also waiting to gauge the market's appetite for US$24 billion of 20-year bonds scheduled to be auctioned tomorrow.
Benchmark 10-year notes last fell 10/32 in price to yield 1.6064 per cent, from 1.573 per cent late on Friday.
Spot gold dropped 0.3 per cent to US$1,770.26 an ounce. Silver fell 0.56 per cent to US$25.81.
Bitcoin last fell 0.14 per cent to US$56,202.89.
Oil prices edged up, but rising Covid-19 infections in India prompted concern than stronger measures to contain the pandemic would hurt economic activity.
A weaker dollar makes oil cheaper for holders of other currencies. However, Covid-19 cases have surged in India, the world's third-biggest oil importer and consumer, dampening optimism for a sustained global recovery in demand.
“The primary hazard to continued oil price strength is the possible re-emergence of Covid-19 case counts on a broad scale,” said Jim Ritterbusch, president of Ritterbusch and Associates.
US crude rose 0.43 per cent to US$63.40 per barrel and Brent was at US$67.09, up 0.48 per cent on the day. ― Reuters
