Economy

US Stock Market Weak Ahead of Opening Amid Profit-Taking, Stimulus Uncertainty

US Stock Market Weak Ahead of Opening Amid Profit-Taking, Stimulus Uncertainty”

The S&P 500 edged up just one point, enough to mark another record high.

To the oil market, WTI crude February futures fell 0.3% or 18 cents, and closed at $53.13 a barrel, after hitting a day high of $53.4 and a low of $52.7.

Asian stock markets retreated Friday after a resurgence of coronavirus infections in China and a rise in cases in Southeast Asia.

"It's still the realisation that the disappointment in the employment is not going away any time soon and that we're not out of the woods from the economic point of view", said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. Analysts came in with low expectations, forecasting the big companies in the S&P 500 will report a fourth straight drop in earnings per share because of the damage from the pandemic. The index was coming off two straight all-time highs.

Citing statistics, in the day's Wall Street closing bell, the trade-sensitive Dow fell 0.04 per cent to 31,176.01 and benchmark S&P 500 added 0.03 per cent to 3,853.07, while tech-heavy Nasdaq gained 0.55 per cent to 13,530.92.

According to Forbes "Dow drops 200 points, stocks slide worldwide as Covid variants stress sentiment amid unclear momentum of stimulation".

Investors weighed another batch of company earnings reports Friday.

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"Earnings have been spectacular", said David Lyon, global investment specialist at J.P. Morgan Private Bank.

A better-than-expected start to earnings reporting season is also helping to lift the market. It also gave a forecast for revenue and profit in the current quarter that matched or topped Wall Street's. "It has been a odd start to the year after two exceptional months, with vaccine optimism keeping sentiment optimistic despite growing risks of Covid in the near term", Oanda senior market analyst Craig Erlam said on Friday. Both are about 4% below pandemic highs earlier this month, as the unexpected begins to emerge.

Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal.

Joe Biden will take the oath of office to become US president later in the day, and he has a flurry of executive actions at the ready. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved.

But other data showed the housing and manufacturing sectors as areas of strength to help buttress the economy. The data suggests the eurozone's economy may contract again this quarter. Sales of previously occupied homes were stronger last month than economists expected.

The yield on the 10-year Treasury rose to 1.10% from 1.07% late Tuesday.



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