Sunday, October 24, 2021

Dow closes lower on trade concerns, but energy stocks gain

Image copyright Reuters Image caption The Nasdaq rose 2.5% in the last week

The Dow Jones Industrial Average closed down 0.57% while the S&P 500 closed down 0.29%.

The Nasdaq Composite Index posted a small gain of 0.09%.

Banks and energy stocks rose on Monday, helping offset losses in technology stocks.

In Europe, the FTSE 100 dipped 0.3% and Germany’s DAX was down 0.48%.

The Dow and S&P were weighed down by a 1.6% fall in tech stocks after Monday’s sell-off.

Investors are nervous about how much longer the bull market can continue, and by whom.

Bank of America and JPMorgan Chase both fell more than 1%.

Analysts said investors were focusing on the impact of the recent rise in US interest rates, and whether the Federal Reserve would maintain a hawkish stance when it meets on Wednesday.

“The market is reacting to market volatility, but I don’t think it’s a real concern for us,” said Francis Gaskins, president of Equiment Gaskins, which tracks brokerages.

“I think the Fed’s going to do what it said it was going to do, but the markets are going to be very volatile, and we’ll see how they react,” he said.

Oil prices recovered early in the session after falling almost 3% in the previous session.

Brent crude futures were up 3.3% at $65.28 a barrel, while West Texas Intermediate increased 3.5% to $61.85 a barrel.

Image copyright Reuters Image caption Brent and WTI futures both rose more than 3% on Monday

There was also optimism about the state of the economy.

Private employers added 277,000 jobs in April, the most in five months, the ADP employment report showed.

The report suggested the labour market is strengthening.

One factor behind the market rally over the last decade has been US tax cuts.

Now, market watchers say, pressure from rising interest rates is beginning to bite.

Over the weekend, investors were concerned that trade tensions between the US and China could flare up further as the G20 summit of world leaders approaches.

President Donald Trump and President Xi Jinping are scheduled to meet on the sidelines of the summit, on 25-26 November.

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