Tech stocks defy downbeat data as dollar, global equities retreat

By Alwyn Scott NEW YORK (Reuters) - The dollar eased and global equity markets fell on Thursday, even as the tech-heavy NASDAQ index touched a record high and looked past the growing signs of prolonged economic weakness. Gold also rose in a sign of safe-haven buying

Reuters August 21, 2020 03:05:24 IST
Tech stocks defy downbeat data as dollar, global equities retreat

Tech stocks defy downbeat data as dollar global equities retreat

By Alwyn Scott

NEW YORK (Reuters) - The dollar eased and global equity markets fell on Thursday, even as the tech-heavy NASDAQ index touched a record high and looked past the growing signs of prolonged economic weakness. Gold also rose in a sign of safe-haven buying.

Economic concerns weighed on equities earlier in the day, reflecting Wednesday's concern from the Federal Reserve about the U.S. labor market slackening as U.S. coronavirus cases rise.

That pessimism was reinforced on Thursday by a surprise jump of more than 1 million in new U.S. claims for unemployment assistance, which sent broader stock indices lower.

The new jobless claims reading was well above the forecast of economists polled by Reuters that expected 925,000 new applications in the latest week.

"Anytime there's concern about the economic recovery, that always hurts," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

But U.S. tech stocks defied the downbeat mood and extended their upward streak. The Nasdaq surged to a fresh record high, led by gains in Apple Inc , Microsoft Corp and Tesla Inc .

The tech-heavy index is 15% higher than its pre-COVID peak in February, while the broad S&P 500 slid from a new all-time high set Wednesday, to below its previous peak also reached six months ago.

"The love for technology stocks grew as the favorite pandemic plays, such as Apple and Tesla, saw strong demand," Edward Moya, senior market analyst at OANDA in New York, said in a note. "No one wants to short this market, so we are seeing investors just rotate back into technology stocks today."

The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 49 nations, fell 0.3% to 570.18.

The Dow Jones Industrial Average <.DJI> rose 0.2%, the S&P 500 <.SPX> gained 0.3% and the Nasdaq Composite <.IXIC> added 1.1%.

Oil prices fell about 1%, meanwhile, as concerns mounted about excess crude supplies. The decline came after Reuters reported that some members of the Organization of the Petroleum Exporting Countries and its allies, known an OPEC+, would need to cut output by an extra 2.31 million barrels per day (bpd) to make up for recent oversupply.

OPEC+ had said on Wednesday the oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.

U.S. crude futures settled down 0.8% at $42.58 per barrel. Brent crude futures settled at $44.90 per barrel, down 1%.

The dollar had been gaining ground since hitting a 27-month low it hit on Tuesday. On Thursday, the dollar index <=USD> fell 0.168%, with the euro up 0.13% to $1.1851.

The Japanese yen strengthened 0.22% versus the greenback at 105.89 per dollar, while Sterling was last trading at $1.3194, up 0.73% on the day.

Wall Street was knocked from its recent highs on Wednesday after the Fed's minutes from its July meeting spooked investors by showing that the swift labor market rebound seen in May and June had likely slowed.

The S&P 500 had reached an all-time high earlier in the week as prices recovered to their pre-pandemic levels.

The sudden bearishness spilled into Asian markets overnight and continued in the European session, although shares started to recover as the morning progressed.

Several Fed policymakers said they may need to ease monetary policy to help get the economy through the coronavirus pandemic.

Gold rebounded overnight and after the U.S. jobless data on demand for the safe-haven asset.

Spot gold added 0.8% to $1,945.61 an ounce. U.S. gold futures settled down 1.2% to $1,946.50 an ounce.

(Reporting by Alwyn Scott, Herbert Lash and Elizabeth Howcroft; Editing by Marguerita Choy and Steve Orlofsky)

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

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.