On Wednesday, the stock markets of U.S. and Europe dipped by concerns on the corporate earnings report, while U.S. bond yields increase on a mixed strong economic data and whirling assumption of who would be the next leader of the Federal Reserve.
The Dow Jones Industrial Average and the S&P 500 experienced tough days in seven weeks. The Dow dipped 112.3 points, or 0.48 percent, to close at 23,329.46. On one hand, the S&P 500 lost 11.98 points or 0.47 percent, to 2,557.15 and the Nasdaq Composite was down 34.54 points, or 0.52 percent, to 6,568.89.
AT&T’s, U.S.’ second-largest wireless carrier, shares fell 3.9 percent due to the disappointing earnings, which pulled down other telecom stocks Verizon and CenturyLink.
European shares closed lower, with a combined batch of company output, flickering profit-taking, a day before the European Central Bank is anticipated to indicate a reduction in its bond-buying scheme, slowly retreating post-crisis stimulus.
The pan-European STOXX 600 closed at its lowest level nearing four weeks, fell 0.6 percent. The FTSEurofirst 300 index lost about 0.61 percent.
MSCI’s broadest index of Asia-Pacific shares added 0.02 percent higher in market close, while Japan’s Nikkei lost 0.45 percent.
MSCI’s measure of stocks from around the world shed 0.34 percent.
“The biggest driver today is profit-taking,” said Sameer Samana, a global quantitative and technical strategist at Wells Fargo Investment Institute.
“We’ve had a really good year and really a good few months. For a lot of investors, as we get closer to the end of the year, taking some chips off the table is not a bad idea,” he added.
He said that indecision around U.S. tax reform and world events such as Catalonia’s independence bid are worrying for investors.
U.S. Bond Yields
U.S. Treasury yields hit months-high highs, supported by robust U.S. sturdy goods and new home sales data.
Benchmark 10-year note yields climbed to seven-month peaks, with the price last dipped 8/32 in price to gain 2.4353 percent, from 2.406 percent late on Tuesday.
The 30-year bond yield increased to five-month highs, last losing 13/32 in price to gain 2.9437 percent, from 2.923 percent late on Tuesday.
Yields stretched gains after data depicting new orders for key U.S.-made non-defense capital goods increased 1.3 percent last month. Other data on Wednesday indicated new single-family home sales swelling nearly 19 percent to a near 10-year peak last month.
Yields also increased amid assumption about President Donald Trump to be a nominee to head the Fed. The awaiting decision has kept investors on the verge over the direction monetary policy might take depending on whom he nominates.
The impending Fed leadership question also weakened U.S. dollar. The dollar index dropped 0.11 percent, with the euro up 0.44 percent to $1.1811.
Meanwhile, the Japanese yen bolstered 0.11 percent to 113.79 per dollar, while sterling last traded at $1.3257, an increase of 0.94 percent on the day.
U.S. crude dipped 0.51 percent to $52.20 per barrel and Brent was last at $58.44, up 0.19 percent. Spot gold increased 0.1 percent to $1,277.41 an ounce.
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