Monday, January 30, 2023
HomeMarketU.S. stocks mostly lower as China COVID-19 fears resurface; Disney buoys Dow

U.S. stocks mostly lower as China COVID-19 fears resurface; Disney buoys Dow

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U.S. stocks traded mostly lower early Monday, in sympathy with losses in Asian and European markets as a fresh round of COVID-19 shutdowns in China rattled investors.

How stocks are trading

  • The Dow Jones Industrial Average
    DJIA,
    -0.08%
    was down 12 points, or less than 0.1%, at 33,733.

  • The S&P 500
    SPX,
    -0.41%
    fell 16 points, or 0.4%, to 3,950.

  • The Nasdaq Composite
    COMP,
    -0.75%
    dropped 62 points, or 0.6%, to 11,084.

The Dow saw a marginal decline last week, while the S&P 500 and Nasdaq Composite lost ground.

What’s driving markets

The holiday-shortened week started with investors in “risk-off” mode as fresh COVID-19 lockdowns in China revived concerns about the global economy.

Wall Street will be closed on Thursday for the U.S. Thanksgiving Holiday and trading is likely to be very thin for Black Friday, when the festive shopping season kicks off in earnest.

Asian
ADOW,
-1.15%
and European stocks
SXXP,
+0.21%
tracked U.S. equity futures lower after the Chinese government introduced further restrictions within the world’s second-biggest economy in the wake of more COVID-19 outbreaks.

Worries about waning demand from the globe’s dominant manufacturer pushed down prices of industrial metals like copper
HG00,
-1.31%,
and forced U.S. crude oil
CL.1,
-5.17%
lower.

“Financial markets have caught a cold amid worries that mounting COVID cases in China and a fresh tightening of restrictions will send a fresh shiver through manufacturing output and push down demand for raw materials,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Evidence of risk aversion and a scramble for perceived havens could be seen in forex and bonds, where the dollar index
DXY,
+0.69%
bounced following a recent slide to gain 0.8% to 107.76 and the 10-year Treasury yield
TMUBMUSD10Y,
3.797%,
which moves in the opposite direction to prices, dipped 1.7 basis points to 3.811%

“The bears are on the prowl today as investors have little choice but to adjust for downside risk,” said Stephen Innes, managing partner at SPI Asset Management.

Helping support Treasurys, and possibly ameliorating declines in stocks, were comments from Atlanta Fed President Raphael Bostic, who on Saturday said he was minded to slow the pace of interest rate increases and saw a possible top, or terminal rate, of 5% for this cycle.

San Francisco Fed President Mary Daly is due to speak about inflation on Monday at 1 p.m. Eastern. The Fed will release on Wednesday at 2 p.m. the minutes of its most recent rate-setting meeting.

It’s a thin week for U.S. economic data, with much of it shoehorned into Wednesday, ahead of Thanksgiving the next day and no reports scheduled for Black Friday either.

Companies in focus

  • Shares of Walt Disney Co.
    DIS,
    +6.97%
    rose 8.7%, leading Dow gainers and buoying the blue-chip index, after the entertainment giant announced Robert Iger’s return as chief executive.

Credit: marketwatch.com

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