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U.S. equities bounce from early lows, finishing slightly in the red | |
(about 7 hours later) | |
U.S. equities recovered from a big drop in early trading Tuesday to finish modestly in negative territory as the debt-laden world economy continues to buffet equities in 2016, with investors fleeing stocks for the safety of bonds. | |
The Dow Jones industrial average closed at 16,014.38, down less than a tenth of a percent. The Standard & Poor’s 500-stock index also dropped less than a tenth of a percent 1,852.21, and the technology-driven Nasdaq was in three tenths of a percent in the red to close at 4,268.76. | |
The Dow was down nearly 146 points at one point during trading, but all three major indices went into positive territory in late afternoon trading before settling slightly down. | |
The bright spots in trading included utilities and some consumer discretionary shares, while banks and technology struggled. | |
Coca-Cola Co. was a bright spot, climbing 1.57 percent after the Atlanta beverage company on Tuesday reported better-than-expected profit and revenue for its fourth quarter. | |
The volatile U.S. trading came after Japanese shares were pounded on Tuesday, dropping more than 5 percent as investors sold equities. | |
The global economy is wheezing on a number of fronts, with oil prices near decade lows, nervousness over the stability of big banks, widespread rioting in the key Asian financial center of Hong Kong and U.S. new-technology stocks down markedly this year. | |
Crude oil continued its months-long slide, with benchmark West Texas Intermediate finishing down six percent at $27.94, again pulling down energy stocks with it as the sector was the day’s worst performer. | |
Bond yields across the globe hit various lows, with the U.S. 10-year Treasury note dropping and the Japanese 10-year bond reaching below zero for the very first time. | |
Japan’s Nikkei Stock Average closed down 5.4 percent, and Asian stocks sank to their lowest level in years. Markets in mainland China, Hong Kong, Malaysia, Singapore, South Korea and Taiwan were closed Tuesday for the New Year holiday. | |
Tuesday comes as U.S. Fed Chairman Janet Yellen prepares to visit Congress this week. The chairman will address the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday. | |
Wall Street will be listeningfor signs of another interest rate hike, which some believe will come this summer. | |
Tuesday’s volatility also arrived as American voters in New Hampshire headed toward the polls in that state’s presidential primary, where Wall Street and economic opportunity have taken a central role. | Tuesday’s volatility also arrived as American voters in New Hampshire headed toward the polls in that state’s presidential primary, where Wall Street and economic opportunity have taken a central role. |
There was small comfort in European markets, where the FTSE was down 1 percent in Tuesday trading, far less than Japan. The STOXX Europe 600 Index closed down 1.48 percent. | |
Deutsche Bank shares fell 1 percent on the New York Stock Exchange. Analysts said the ability of the bank to pay the coupons on risky bonds could weigh on the German financial giant. The bank’s shares are down more than 30 percent this year. |