Wednesday, February 28, 2024

Wall Street opens higher led by energy, healthcare stocks

by Associated Press

Wall Street is opening slightly higher Wednesday, led by energy and healthcare stocks. The S&P 500 is recovering some of the ground lost in Tuesday’s late sell-off. The 10-year Treasury yield is rising, as are precious metals and crude oil. Indexes fell in Japan, Australia and South Korea, but rose in China. Analysts say investors are prone to cash in on recent gains in stock markets, given the current murky outlook. The recent surge in new coronavirus cases, particularly in the U.S., has clouded hopes for a relatively quick economic turnaround as global growth relies on a healthy U.S. economy.

Global stock markets were mixed Wednesday as uncertainty over the coronavirus pandemic sapped the buying enthusiasm that has been driving prices higher.

Wall Street appeared set to edge up on the open, with Dow futures up 0.1% and S&P 500 futures 0.2% higher. In Europe, France’s CAC 40 fell 0.7% to 5,007, while Germany’s DAX was down 0.3% at 12,580. Britain’s FTSE 100 was flat at 6,188.

Given the current murky outlook, investors are likely to cash in on recent gains, analysts said.

“Investors are trying their best to look through the knotty COVID-19 economic entanglement,” but the recent bullish mood remains on shaky ground, and could easily sour, said Stephen Innes, chief global market strategist at AxiCorp, said in a report.

“It is impossible for investors not to grow weary and eventually, at some point, fall prey to the endless drip of negative COVID-19 stories and how the second wave virus will crush the market,” he added.

Japan’s benchmark Nikkei 225 dropped 0.8% to finish at 22,438.65. Australia’s S&P/ASX 200 dipped 1.5% to 5,920.30. South Korea’s Kospi shed 0.2% to 2,158.88. Hong Kong’s Hang Seng rose 0.6% after fluctuating during much of the day to 26,129.18, while the Shanghai Composite bounced higher, adding 1.7% to 3,403.44.

Although some Asian benchmarks fell, trading overall was relatively calm, said Jeffrey Halley, senior market economist at trading platform Oanda. Much of the regional concern is focused on the rising cases in the U.S. as Asia needs a recovery there to attain growth, he said.

“Unfortunately, when America catches a cold, the world catches the flu; that maxim has not changed. It does have the potential to delay and depress the world’s nascent recovery,” said Halley.

Optimism that the U.S. economy is on the mend as businesses reopen has helped drive stocks higher. But the recent surge in new coronavirus cases has clouded hopes for a relatively quick economic turnaround. Investors are also girding for what the next few weeks will reveal about the health of corporate America as companies begin reporting their second-quarter results.

“It’s not unusual for these five-day runs to be met with a bout of profit-taking, especially given the headlines on the virus,” said Quincy Krosby, chief market strategist at Prudential Financial. “When you move toward overbought conditions it doesn’t take much for the market to burn off some of the froth.”

Unprecedented amounts of aid from central banks and governments around the world are helping to prop up markets. But the worsening infection levels across much of the U.S. are countering that support.

Benchmark U.S. crude was flat at $40.62 a barrel in electronic trading on the New York Mercantile Exchange. It slipped a penny to settle at $40.62 per barrel on Tuesday. Brent crude, the international standard, rose 10 cents to $43.18 per barrel.

The dollar inched down to 107.51 Japanese yen from 107.53 yen on Tuesday. The euro rose to $1.1286 from $1.1274.

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