BNN Bloomberg's closing bell update: Feb. 19, 2021
U.S. stocks finished mostly lower as benchmark Treasury yields climbed to the highest levels in a year, renewing concern that rising borrowing costs and price pressures could derail the economic recovery.
The S&P 500 Index turned negative in the final minutes of trading Friday, ending lower for the first week in three. Utilities and consumer staples led the declines, while the materials and energy sectors finished in the green. The tech-heavy Nasdaq 100 was weighed down by Microsoft Corp. and Facebook Inc.
“The two big things right now are waiting for stimulus and this idea of the reflation trade -- investors have a keen eye out for signs of inflation,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. “You see Treasury yields moving higher, that’s causing a bit of consternation in the markets.”
Corporate earnings reports had given investors something to think about on Friday other than the relentless rise in Treasury yields, which dominated discussion this week and fueled concern about the staying power of the New Year stock rally. Applied Materials Inc. climbed after a strong forecast for the current quarter helped by growing orders from chipmakers rushing to produce more supply.
Recent economic data are a reminder of the fragility of the growth backdrop, with a report Friday showing U.K. retail sales fell more than twice as fast as expected in January.
Meanwhile, the Stoxx Europe 600 index advanced for the first time in four days, while the euro strengthened after Germany’s manufacturing PMI climbed more than forecast in February. The British pound rallied above US$1.40 for the first time since 2018.
Oil traded below US$60 a barrel as wells slowly restarted in Texas after being hit by a big freeze. The White House said it would be willing to meet with Iran, potentially paving the way for more crude exports from the Persian Gulf nation.
These are some of the main moves in markets:
The S&P 500 Index dipped 0.2 per cent to 3,906.71 as of 4:08 p.m. New York time, the lowest in two weeks.
The Dow Jones Industrial Average was little changed at 31,494.32.
The Nasdaq 100 Index declined 0.4 per cent to 13,580.78, the lowest in more than two weeks.
The Stoxx Europe 600 Index advanced 0.5 per cent to 414.88.
The Bloomberg Dollar Spot Index decreased 0.2 per cent to 1,124.92.
The euro increased 0.2 per cent to US$1.2115.|
The Japanese yen strengthened 0.2 per cent to 105.47 per dollar, the largest gain in more than a week.
The British pound gained 0.2 per cent to US$1.4004, the strongest in almost three years.
The yield on 10-year Treasuries increased four basis points to 1.34 per cent, the highest in about a year.
Germany’s 10-year yield climbed four basis points to -0.31 per cent, the highest in more than eight months.
Britain’s 10-year yield increased eight basis points to 0.698 per cent, the highest in 11 months on the largest climb in almost two months.
West Texas Intermediate crude decreased 2.5 per cent to US$58.98 a barrel, the lowest in more than a week on the biggest dip in 15 weeks.
Gold strengthened 0.3 per cent to US$1,781.34 an ounce, the first advance in more than a week.