Stocks, bonds fall, dollar flat as Fed fears subside

By Alwyn Scott NEW YORK (Reuters) - Stock prices and bond yields fell in relatively light trading on Friday as investors reacted to dwindling aid for the U.S. economy and rising coronavirus infection rates

Reuters November 21, 2020 04:06:37 IST
Stocks, bonds fall, dollar flat as Fed fears subside

Stocks bonds fall dollar flat as Fed fears subside

By Alwyn Scott

NEW YORK (Reuters) - Stock prices and bond yields fell in relatively light trading on Friday as investors reacted to dwindling aid for the U.S. economy and rising coronavirus infection rates.

The Dow Jones Industrial Average <.DJI> fell 219.75 points,or 0.75%, to 29,263.48, the S&P 500 <.SPX> lost 24.33 points, or0.68%, to 3,557.54 and the Nasdaq Composite <.IXIC> dropped49.74 points, or 0.42%, to 11,854.97.

The S&P 500 and the Dow posted marginal losses for the week,while the tech-laden Nasdaq settled a bit higher from lastFriday's close.

Benchmark 10-year Treasuries yields fell to an 11-day low of 0.818%, before bouncing back to 0.829%. The yields are down from an eight-month high of 0.975% last week, when supply and optimism over vaccines pushed the rates higher, and have now retraced almost all of that spike.

In afternoon trading, the dollar was flat against a currency basket at 92.369 in a quiet day for currency markets. The euro was down 0.1% against the dollar at $1.1859 , posting a small weekly gain.

Investors mostly sat pat on positions after recognizing that a wind-down of U.S. Federal Reserve pandemic lending programs was unlikely to have much effect, said David Bahnsen, chief investment officer, the Bahnsen Group, a wealth management firm in Newport Beach, California.

"It would be virtually incomprehensible that any market actor could have actually thought that extension of the emergency provisions of the Fed was needed," Bahnsen said.

Much of the money has not even been used, he added.

Mnuchen defended the decision to let the programs expire at year end and noted the Treasury could reactivate them. "We have plenty of capacity left," he said.

FACTBOX-This is where the Fed's emergency facilities stand.

Mnuchen's comments that remaining money could be used for grants rather than loans suggested that "this could be an avenue to a targeted fiscal stimulus deal in the lame duck session," said Yousef Abbasi, global market strategist at StoneX, a global financial services firm.

Investors remain worried about the economic cost of rising infections and new lockdowns and restrictions, which grew Friday. White House coronavirus Task Force coordinator Deborah Birx on Friday said more than half the United States was a virus-rampant "red zone," and Americans should limit gatherings on Thanksgiving Day to immediate family members.

But investors also are moving beyond the safety of big tech stocks to small cap and even emerging markets as they anticipate improving economies next year, Bahnsen said.

A weakening dollar, strengthening global manufacturing and emerging markets stocks that are less expensive than American equities "really broaden that investing universe," he said. "I think that's healthy for investors."

Indeed, optimism about coronavirus vaccines prompted investors to pump $27 billion into equity funds last week, BofA said on Friday, citing data from EPFR.

Still, despite buying of hard-hit sectors such as banks, travel and leisure and oil, BofA said, investors "ain't selling tech."

(Reporting by Alwyn Scott; Editing by Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

U.S. job openings rise slightly in September
Business

U.S. job openings rise slightly in September

WASHINGTON (Reuters) - U.S. job openings increased moderately in September and layoffs appeared to abate, pointing to a gradual labor market recovery from the COVID-19 pandemic.

Central bankers seek new role in brave new world
Business

Central bankers seek new role in brave new world

By Balazs Koranyi and Francesco Canepa FRANKFURT (Reuters) - Taking a break from fighting the coronavirus crisis, the world's top central bankers will attempt to resolve the existential questions of their profession this week as they tune into the European Central Bank's annual policy symposium. Having struggled to lift anaemic inflation for years, officials including the heads of the ECB, the U.S. Federal Reserve and the Bank of England will attempt to figure out why monetary policy is not working as it used to and what new role they must play in a changed world - be it fighting inequality or climate change.

Asian stocks extend gains as vaccine hopes support global reopening
Business

Asian stocks extend gains as vaccine hopes support global reopening

By Lawrence Delevingne BOSTON (Reuters) - Asian shares rose on Wednesday as hopes for a successful coronavirus vaccine lifted expectations of a swift reopening of the global economy, which would help the region's heavily trade-dependent markets.