Salem Radio Network News Wednesday, October 20, 2021

Business

Stocks claw back as markets calm after Evergrande-led slide

By Lewis Krauskopf and Lawrence White

NEW YORK/LONDON(Reuters) – World stock markets edged back on Tuesday while the U.S. dollar held relatively steady a day after heavy selling in equities, as investors assessed the level of contagion stemming from the distress of debt-saddled developer China Evergrande.

MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.35%, following Monday’s biggest percentage drop in two months. European indexes rose solidly while Wall Street’s main gauges were gaining in afternoon trade.

Price moves in bonds and currencies were relatively subdued. On Monday, safe-haven assets drew bids as investors became risk averse.

Investors were still focused on the situation at Evergrande, where persistent default fears eclipsed efforts by the debt-laden group’s chairman to lift confidence as Beijing showed no sign it would intervene to stem any domino effects across the global economy.

“There are still issues that the market is dealing with,” said David Joy, chief market strategist at Ameriprise Financial in Boston. “But stabilization is a good thing after the downdraft that we had yesterday.”

On Wall Street, the Dow Jones Industrial Average .DJI rose 128.56 points, or 0.38%, to 34,099.03, the S&P 500 .SPX gained 13.23 points, or 0.30%, to 4,370.96 and the Nasdaq Composite .IXIC added 66.90 points, or 0.45%, to 14,780.80.

The Cboe Volatility Index .VIX retreated after hitting a four-month high a day earlier, last down 2.25 points to 23.46.

The pan-European STOXX 600 index .STOXX rose 1%, with Germany’s DAX .GDAXI rising 1.4%.

Canada’s main stock index .GSPTSE gained as Prime Minister Justin Trudeau’s limited victory in the federal election raised hopes that his government would keep the stimulus taps open.

Central bank meetings in the United States and elsewhere in the world were soon to take center stage for markets, with a Federal Reserve meeting due to conclude on Wednesday as investors look for when it will ease its bond-buying program.

In currency trading, the dollar index =USD fell 0.053%, with the euro EUR= up 0.02% to $1.1727. The Japanese yen strengthened 0.12% versus the greenback at 109.25 per dollar.

“There is just a lot of wait-and-see as far as what is going to happen with the Fed, what is going to happen with Evergrande, and right now if you are trying to make a dollar bet you really just want to wait until you get a better sense of what is going to happen with Evergrande and what the Chinese government is going to do,” said Edward Moya, senior market analyst at OANDA in New York.

Benchmark 10-year notes US10YT=RR last fell 3/32 in price to yield 1.318%, from 1.309% late on Monday.

Oil prices edged higher in a see-saw session, as concerns about the global consumption outlook counterbalanced the struggle by big OPEC producers to pump enough supply to meet growing demand.

U.S. crude CLc1 rose 0.23% to $70.45 per barrel and Brent LCOc1 was at $74.07, up 0.2% on the day.

Spot gold XAU= added 0.7% to $1,776.27 an ounce.

(Additional reporting by Chuck Mikolajczak in New York, Tom Westbrook in Singapore, Hideyuki Sano in Tokyo, Anushka Trivedi in Bengaluru, Paulina Duran in Sydney and Danilo Masoni in Milan; Editing by Dan Grebler and Steve Orlofsky)

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