Stocks are opening broadly lower on Wall Street, getting the week off to a sluggish start and continuing a losing streak. The S&P 500 gave up 0.6% in the early going Monday, and other major indexes were also lower. Boeing helped pull the Dow Jones Industrial Average lower after the company recommended that airlines ground all 777s with the same type of engine that blew apart shortly after takeoff in Denver over the weekend. Raytheon, the parent company of Pratt & Whitney, which made the engine, was also lower in early trading. Crude oil prices and Treasury yields rose.
France’s CAC 40 slipped 1.1% in early trading to 5,708.39, while Germany’s DAX dove 1.3% to 13,816.87. Britain’s FTSE 100 declined 1.1% to 6,554.12. U.S. shares were to open lower, with the future contract for the Dow industrials sliding 0.7% to 31,224. The S&P 500 future fell nearly 1% to 3,865.12.
Benchmarks rose in Japan but fell in South Korea, Australia and China. Investors remain focused on the future of global economies badly hit by COVID-19 and when and whether there will be enough stimulus to fix it.
But the U.S. $1.9 trillion economic package proposed by President Joe Biden also heralds hope for export-reliant regional economies.
Japan’s benchmark Nikkei 225 gained 0.5% to finish at 30,156.03. South Korea’s Kospi dipped 0.9% to 3,079.75. Australia’s S&P/ASX 200 edged 0.2% lower to 6,780.90. Hong Kong’s Hang Seng fell 1.1% to 30,319.83, while the Shanghai Composite dropped 1.5% to 3,642.44.
Japan began administering vaccines for COVID-19 last week. It was the last of the Group of Seven industrial nations to get started, beginning with health workers. Prospects for further shipments of vaccine remain uncertain, according to Taro Kono, the Japanese minister tasked with overseeing the effort.
Vaccination drives are set to start soon in other Asian nations, such as Malaysia, Vietnam and the Philippines.
Investors remain focused on the future of global economies badly hit by COVID-19 and the potential for more stimulus to fix it.
The U.S. House of Representatives is likely to vote on Biden’s proposed package by the end of the week. It would include $1,400 checks to most Americans, additional payments for children, and billions of dollars in aid to state and local governments as well as additional aid to businesses impacted by the pandemic.
“But timing is everything,” Stephen Innes of Axi said in a commentary. He noted that inflation concerns are overhanging the market, as the economy heals from the pandemic downturn while the Biden administration strives to recover the millions of jobs lost.
“The next leg of the reflation will have to be carried more and more by a continued recovery in economic growth, as fiscal and monetary stimulus gets increasingly packed into the price,” he said.
One challenge is to keep inflation in check and minimize trauma to the markets from adjustments in the Federal Reserve’s ultra-supportive monetary policy.
After an impressive start to the year, bullish sentiment is wavering, said Jeffrey Halley of Oanda.
“At this stage the price action looks corrective and I expect equities to find a wall of buyers on any material dips,” he said.
In energy trading, U.S. benchmark crude added 31 cents to $59.55 a barrel in electronic trading on the New York Mercantile Exchange. It fell $1.27 to $59.26 per barrel on Friday. Brent crude, the international standard, rose 50 cents to $63.41 a barrel.
In currency trading, the U.S. dollar rose to 105.80 Japanese yen from 105.47 yen late Friday. The euro cost $1.2094, down from $1.2125.