US stocks stumble as tech titans tumble
European stocks rebounded from losses at the start of the year on Thursday, while the picture in the US was mixed as investor enthusiasm for American tech giants continued to wane.
Most Asian stocks dipped Thursday in line with Wall Street on Wednesday, after minutes from the US Federal Reserve's December meeting dampened hopes for an early interest-rate cut.
European stocks gradually shrugged off the negative sentiment and ended the day with gains of around half a percentage point.
In the US, the Dow Jones Industrial Average finished the day flat, while the broad-based S&P 500 and the tech-rich Nasdaq Composite Index both slumped.
To get the rate cuts that markets have already priced in, the data have to start showing much weaker numbers, said Karl Haeling of LBBW.
But he added that the market was "holding up reasonably well if you really take away the tech stocks."
Companies including Apple and Amazon both finished the day in the red, continuing a recent decline in the market value of some of America's biggest tech firms.
- Oil slips -
Oil prices at first rallied further on supply concerns, before giving up their gains to end the day in negative territory.
"With Western nations threatening more forceful actions to defend shipping in the Red Sea, the situation was looking tense even before yesterday's explosions in Iran," noted Steve Clayton, head of equity funds at UK stockbroker Hargreaves Lansdown.
Twin bomb blasts on Wednesday killed at least 84 people at a memorial in Iran for Revolutionary Guards general Qasem Soleimani, who was killed four years ago in a US strike in Iraq.
Meanwhile, "the Israeli/Hamas conflict rages on, leaving oil traders increasingly wary of the security of supplies from the region," Clayton added.
- Stocks rally fades -
A global rally for equities that characterized the last months of 2023 has petered out on concerns that the buying may have run ahead of itself.
The selling pressure was enhanced Wednesday when the Fed minutes showed officials expect to keep US interest rates elevated for some time as they want to make sure they have inflation under control.
That dealt a blow to confidence on trading floors, where investors had been betting on a cut as soon as March after the US central bank's post-meeting statement last month showed they envisioned three reductions in 2024.
"The trouble is that the markets are pricing in up to 150 basis points-worth of rate cuts this year, double the Fed's forecast," said market analyst David Morrison at Trade Nation.
"Consequently, there's plenty of scope for disappointment," he added.
Data released Thursday showed the US private sector added more jobs than anticipated in December, but wage growth slowed.
Focus now turns to the release of key non-farm payrolls data due on Friday.
"The US unemployment situation is a key factor in the outlook for inflation," said Morrison.
- Key figures around 2145 GMT -
New York - Dow: FLAT at 37,6440.34 points (close)
New York - S&P 500: DOWN 0.3 percent at 4,688.68 (close)
New York - Nasdaq: DOWN 0.6 percent at 14,510.30 (close)
London - FTSE 100: UP 0.5 percent at 7,723.07 (close)
Paris - CAC 40: UP 0.5 percent at 7,450.63 (close)
Frankfurt - DAX: UP 0.5 percent at 16,617.29 (close)
EURO STOXX 50: UP 0.6 percent at 4,474.01 (close)
Tokyo - Nikkei 225: DOWN 0.5 percent at 33,288.29 (close)
Hong Kong - Hang Seng Index: FLAT at 16,645.98 (close)
Shanghai - Composite: DOWN 0.4 percent at 2,954.35 (close)
Euro/dollar: UP at $1.0952 from $1.0922 on Wednesday
Dollar/yen: UP at 144.61 yen from 143.29 yen
Pound/dollar: UP at $1.2682 from $1.2665
Euro/pound: UP at 86.32 pence from 86.23 pence
West Texas Intermediate: DOWN 0.7 percent at $72.19 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $77.59 per barrel
burs-rl/bp/da/bfm
K.Bastien--RTC
