Asian stocks slip after S&P 500 posts first monthly decline in ’21
Asian markets tumbled Friday after Wall Street’s worst monthly loss since the start of the pandemic.
Tokyo slipped 2.3% and the Australian benchmark fell 2.2%. The Shanghai and Hong Kong markets were closed for holidays.
The S&P 500 ended September down 4.8%, its first monthly decline since January and the largest since March 2020.
After climbing steadily for much of the year, the stock market has become volatile in recent weeks with the spread of the more contagious delta variant of COVID-19, the surge in long-term bond yields and the news that the Federal Reserve could begin to withdraw support for the economy.
Japan lifted the pandemic state of emergency on Friday after seeing the number of coronavirus cases decline as vaccinations ramp up. A quarterly survey by the Bank of Japan found that the business climate among Japanese manufacturers has reached its highest level in nearly three years.
The results of the “tankan” survey, released on Friday, revealed sentiment among major manufacturers fell from 14 to 18. This is the highest level since the end of 2018. The reading for non-manufacturers increased only slightly, to 2 from 1.
However, she and various other investigations have found that manufacturers are grappling with shortages of computer chips and other components, amid supply chain and shipping disruptions that could hamper recovery from the pandemic.
Tokyo’s Nikkei 225 lost 681.59 points to 28,771.07 points, while the S & P / ASX 200 lost 2.2% to 7,170.50. Seoul’s Kospi lost 1.6% to 3,018.58. Shares also fell in Taiwan and Southeast Asia.
The S&P 500 lost 1.2% on Thursday, ending the month down 4.8% in its first monthly decline since January and the largest since March 2020, when the viral outbreak rocked markets as it was wreaking havoc on the global economy.
The benchmark is still up 14.7% for the year.
The S&P 500 lost 51.92 points to 4,307.54. The Dow Jones Industrial Average lost 1.6% to 33,843.92, while the Nasdaq slipped 0.4% to 14,448.58. Small business stocks also lost ground. The Russell 2000 Index fell 0.9% to 2,204.37.
Bond yields fell slightly. The yield on the 10-year Treasury bill, a benchmark for many types of loans, fell to 1.48% from 1.50% on Wednesday night. It was as low as 1.32% just over a week ago.
All sectors of the S&P 500 finished in the red on Thursday, with technology stocks, banks and a mix of companies providing consumer goods and services accounting for much of the pullback. More than 90% of the stocks in the index fell.
In recent weeks, economic data has shown that the highly contagious delta variant has held back consumer spending and the labor market recovery.
The Labor Department said jobless claims rose for the third week in a row and were higher than economists had expected. The Commerce Department raised its estimate of second-quarter economic growth to 6.7%, which was slightly better than economists expected, but expects growth to slow to 5.5% in the third quarter. .
Inflation is another source of concern. A wide range of companies have issued warnings about the impact of rising prices on their finances. Sherwin-Williams and Nike are among many companies that have warned investors of supply chain issues, higher raw material costs and labor issues.
Investors are still trying to determine whether these problems are temporary and part of the economic recovery or could persist longer than expected. The next round of corporate earnings reports may shed some light on how companies are dealing with these issues.
On Thursday, a bill to fund the U.S. government until Dec. 3 and avoid a partial federal shutdown cleared Congress. But the dispute between Democrats and Republicans over extending the country’s debt limit remains unresolved.
Homebuilders fell widely following a report showing average long-term mortgage rates soared above 3% this week for the first time since June. Mortgage rates tend to follow the direction of the 10-year Treasury yield. The average rate on a 30-year mortgage has risen to 3.01%, according to mortgage buyer Freddie Mac. The rate was on average 2.88% last week and a year ago.
Higher mortgage rates limit the purchasing power of homebuyers, potentially charging some potential homeowners. LGI Homes fell 5.1% and PulteGroup slipped 4.2%.
In other exchanges on Friday, benchmark US crude oil added 8 cents to $ 75.11 a barrel in electronic trading on the New York Mercantile Exchange. It rose 18 cents to $ 75.03 a barrel on Thursday.
Brent crude oil gained 12 cents to $ 78.43 a barrel.
The dollar slipped to 111.22 Japanese yen from 111.28 yen. The euro was unchanged at $ 1.1580.