Wall Street stocks fell for a second session Thursday with analysts pointing to consolidation of earlier gains in 2023, while the British pound rallied as the Bank of England chief expressed worry over inflation.
Major indices in New York had opened higher in connection with a retreat in the yield of the 10-year US Treasury note. But yields later advanced, a reversal that suggests expectations for more Federal Reserve interest rate hikes.
The surge coincided with a mid-session reversal in stocks that left the S&P 500 down nearly one percent at the close.
“The market had a very good rally over the last five or six weeks and now it’s normal and healthy to see (it) pull back and digest that big run it just had,” said Adam Sarhan of 50 Park Investments.
Earlier, London continued its march towards reaching 8,000 points for the first time, while bourses in Paris and Frankfurt also advanced.
Leading the way in London was Asia-focused Standard Chartered — which closed the day with a gain of more than 11 percent following a Bloomberg report that First Abu Dhabi could revive a $35 billion to acquire the bank.
But shares in Credit Suisse tanked after Switzerland’s second-biggest bank posted its biggest annual loss since the 2008 global financial crisis and said it expects to see further losses in 2023.
Credit Suisse, which unveiled a dramatic restructuring plan in October, reported a net loss of 7.3 billion Swiss francs ($7.9 billion) for 2022.
The results sent Credit Suisse shares nearly 15 percent lower.
Mumbai-listed conglomerate Adani tumbled again — this time by more than 11 percent — after global stock index compiler MSCI said it was reviewing the status of equities in the group.
The business empire of Indian billionaire Gautam Adani has lost more than $100 billion in value after US short-selling investment group Hindenburg Research accused it of artificially inflating share prices.
Disney was also in focus after announcing it will lay off 7,000 employees. The job cuts follow similar moves by US tech giants dialing back from a hiring spurt during the height of the Covid pandemic.
Disney initially rallied on the news, but finished 1.3 percent lower.
In currency trading, the pound jumped more than one percent against the dollar after the head of the Bank of England, Andrew Bailey, expressed concern over persistently high inflation even if the rate of price increases shows signs of cooling.
Bailey spoke on the eve of data due Friday that could show Britain officially in recession — should it be confirmed that the economy contracted in the final quarter last year.
“We are concerned about persistence (of high inflation). This is why we (again) raised interest rates,” Bailey told the Treasury Committee.
UK inflation slowed to 10.5 percent in December — still around 40-year highs and more than five times the BoE’s official target level of two percent.
Key figures around 2150 GMT
New York – Dow: DOWN 0.7 percent at 33,699.88 (close)
New York – S&P 500 DOWN 0.9 percent at 4,081.50 (close)
New York – Nasdaq: DOWN 1.0 percent at 11,789.58 (close)
London – FTSE 100: UP 0.3 percent at 7,911.15 (close)
Frankfurt – DAX: UP 0.7 percent at 15,523.42 (close)
Paris – CAC 40: UP 1.0 percent at 7,188.36 (close)
EURO STOXX 50: UP 1.0 percent at 4,250.14 (close)
Tokyo – Nikkei 225: DOWN 0.1 percent at 27,584.35 (close)
Hong Kong – Hang Seng Index: UP 1.6 percent at 21,624.36 (close)
Shanghai – Composite: UP 1.2 percent at 3,270.38 (close)
Euro/dollar: UP at $1.0739 from $1.0712 on Wednesday
Pound/dollar: UP at $1.2117 from $1.2072
Euro/pound: DOWN at 88.60 pence from 88.74 pence
Dollar/yen: UP at 131.56 yen from 131.40 yen
Brent North Sea crude: DOWN 0.7 percent at $84.50 per barrel
West Texas Intermediate: DOWN 0.5 percent at $78.06 per barrel
burs-jmb/bys
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