Financial industry, Banking & Earnings :: Market news

Europe stocks rise but bond yield falls show investor caution

´╗┐European shares rose on Tuesday, shrugging off falls on Asian bourses, but low-risk government debt yields fell as investors fretted about a meeting between the U.S. and Chinese presidents and Donald Trump's ability to deliver economic stimulus. The dollar edged up against a basket of major currencies but lost ground against the safe-haven Japanese yen. Gold, another asset sought in uncertain times, also rose. In emerging markets, the South African rand fell more than 1 percent against the dollar and bank shares fell after S&P Global cut its credit rating to junk on Monday. The pan-European STOXX 600 share index edged up 0.1 percent, after falling from a 16-month high on Monday. Britain's FTSE 100 index rose 0.5 percent. Shares have hit record highs across the globe in recent months, partly in anticipation of Trump cutting taxes, easing regulation and raising infrastructure spending. However, Trump's struggles to push other legislation through Congress has led some to question whether he will be able to fully make good on his campaign pledges. Data on Monday showing U.S. car sales lagged market, which helped push Wall Street lower, and geopolitics, including the Russian metro blast and Trump comments on North Korea, also weighed on markets. Automaker stocks were the main drag on Tokyo shares on Tuesday; the Nikkei fell 0.9 percent to a 10-week low, also hit by the impact of the strong yen on exporters.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, having hit a 21-month high last week. Yields on low risk U.S. and German government bonds fell. falls. Benchmark 10-year U.S. Treasury yields were down 2 basis points at 2.33 percent after falling as low as 2.31 percent, its lowest in more than a month, in Asian trade. German 10-year yields touched their lowest level since March 1 and last stood at 0.26 percent, down 1.6 bps. Italy's bonds outperformed the rest of the euro zone on the prospect of help for two struggling Italian lenders.

Yields on the bonds of Banca Popolare di Vincenza and Veneto Banca fell sharply after a European Commission spokesperson said late on Monday said there could be a solution on a bailout. Italian 10-year government bond yields fell 2.7 bps to 2.3 percent."Italy's banking sector has been a never-ending story, so any news pointing towards state support reduces the risk of a more severe development that could be the beginning of a banking crisis," said DZ Bank strategist Daniel Lenz. The dollar inched up 0.1 percent against its currency basket but fell 0.4 percent to 110.44 yen, off a low for the day of 110.32 yen."(The yen buying) is based on broad-based risk-off since yesterday. There was a tragedy in Russia and there may be some hedging-type buying ahead of the French presidential debate and also French elections in three weeks," said Yujiro Gato, currency analyst with Nomura in London.

The euro fell 0.2 percent to $1.0652 and sterling fell 0.5 percent to $1.2428. The Australian dollar was 0.6 percent weaker at $0.7555 after the central bank held rates steady at a record low 1.5 percent as expected, and said growth in household borrowing, largely for housing, was outpacing rises in household income. South Africa's rand fell as much as 1.9 percent before recovering to trade down 1.1 percent at 13.83 per dollar while bank shares tumbled after the credit rating cut in response to President Jacob Zuma's dismissal of his finance minister, Pravin Gordhan, last week. Yields on South African dollar-denominated government bonds rose, with the 10-year benchmark yielding nearly 5 percent. Gold hit a one-week high around $1,260 an ounce. Oil prices fell, hit by a rebound in Libyan crude production and an increase in U.S. drilling. Brent crude fell 21 cents a barrel to $52.92. For Reuters Live Markets blog on European and UK stock markets see this site/url=this site

Wall Street drifts lower; investors worry about tax cut delay

´╗┐Wall Street drifted lower on Monday as investors worried that President Donald Trump's plan to cut taxes and boost the economy could take longer than previously expected. The U.S. stock market has been on a record-setting spree since the election of Trump as president, but the rally has faltered in recent weeks as investors fret about a lack of clarity on his proposals to reform taxes and cut regulation. The S&P 500 and the Dow ended lower after FBI Director James Comey told a congressional hearing he had seen no evidence to support a claim by Trump that former President Barack Obama had wiretapped his campaign headquarters in Trump Tower in New York. His unsubstantiated tweet distracted from the claims of Russian interference in the election - as well as efforts by Republicans to push through a healthcare overhaul. "It's just one more day delaying talking about policy," said Ian Winer, director of trading at Wedbush Securities in Los Angeles. "The market wants tax reform, and you need to get healthcare done before you get tax reform." The SPDR S&P Retail ETF (XRT) fell 1.5 percent, all but erasing its gains since Trump's election as investors fretted that a border adjustment tax being pushed by Republicans in Congress would lead to higher prices for consumer products. The S&P 500 is unchanged from a week ago, but since the presidential election on Nov 8, it has surged 11 percent, heightening concerns about valuations. The S&P 500 is trading at nearly 18 times expected earnings, compared with a 10-year average of 14, according to Thomson Reuters Datastream.

The Dow Jones Industrial Average . DJI inched down 0.04 percent to end at 20,905.86 points, while the S&P 500 . SPX lost 0.20 percent to 2,373.47. The Nasdaq Composite . IXIC edged up 0.01 percent to finish at 5,901.53 after briefly hitting an intraday record high. Seven of the 11 major S&P sectors were lower, with the financial index's . SPSY 0.9 percent fall leading the decliners. Oil fell as investors continued to unwind bets on higher prices.

The U.S. Federal Reserve's conservative rate guidance is also keeping the market in check. A host of Fed officials are scheduled to speak this week, including Chair Janet Yellen on Thursday. The Fed is on track to raise interest rates twice more this year and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, Chicago Fed President Charles Evans said on Monday. Last week, the central bank raised interest rates for the first time this year but stuck to its outlook for two more hikes this year, instead of three expected by the market.

China prepares to counter any U.S. trade penalties: sources BEIJING China's government has been seeking advice from its think-tanks and policy advisers on how to counter potential trade penalties from U.S. President Donald Trump, getting ready for the worst, even as they hope for business-like negotiations.

Fed on track to raise U.S. rates twice more this year: Evans NEW YORK The Federal Reserve is on track to raise interest rates twice more this year after a policy tightening last week, and it could be more or less aggressive depending on inflation and fiscal policies from the Trump administration, a Fed rate-setter said on Monday.

Credit card applications drop at Wells Fargo in February NEW YORK Wells Fargo & Co saw a drop in consumers opening checking and credit card accounts in February, the bank said on Monday, marking the sixth straight month of decline since a sales scandal rocked the bank last year.