GLOBAL MARKETS-Wall St stocks fall, bond yields rise as China drops quarantine rule

(Updates to catch prices, adds analyst commentary)

By Sinéad Carew

NEW YORK, Dec 27 (Reuters) – The S&P 500 and Nasdaq fell on Tuesday after the release of U.S. economic data at the start of a shortened week while bond yields rose after China said it would ease its COVID-19 quarantine rules. 19 destroy. for domestic passengers.

U.S. Treasury yields rose as investors tried to gauge the path of interest rate hikes from the Federal Reserve and eyed an easing of China restrictions. While China’s changes were seen as a potential economic boost, money managers were cautious about reports of rising infection rates there.

Meanwhile, US economic data showed that the trade deficit in advanced goods narrowed to $83.35 billion in November from $98.8 billion the previous month, while a separate report pointed to continued struggles for the housing market as that house prices fell under rising mortgage rates.

Oil futures, after hitting a three-week high earlier in the day, were down in a session on the restart of some US power plants due to winter storms and hopes for a revival in demand after restrictions were eased. most recently eliminated China’s.

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Rising Treasury yields are putting pressure on growth stocks, including the rate-sensitive technology sector, according to Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

“It’s a lack of someone who has the confidence to step up and buy,” O’Rourke said.

Strategists also weighed in on a sharp pullback for electric car maker Tesla Inc, which fell 11.4% on Tuesday and fell 11.4% since August 2020. Reuters reported that Tesla plans to start a reduced production plan in Shanghai in January, extending the production cut. month

Gene Goldman, chief investment officer at Cetera Investment Management, described Tuesday’s session as “lacklustre” as investors awaited next week’s Fed meeting and economic data such as the jobs report.

The Dow Jones Industrial Average rose 37.83 points, or 0.11%, to 33,241.76, the S&P 500 lost 15.56 points, or 0.40%, to 3,829.26 and the Nasdaq Composite lost 144.21%. ,34.34% decreased, from 144.21.34.3% or .

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Markets in some regions including London, Dublin, Hong Kong and Australia remained closed after the Christmas break.

MSCI’s gauge of stocks worldwide fell 0.15 percent and is down 19.8 percent year-to-date.

While Cetera’s Goldman said the change in China’s COVID policies would be “good news for the global economy down the road,” he pointed to renewed concern among people in China over the current surge in COVID infections as China eased restrictions.

Benchmark 10-year notes rose 10.7 basis points to 3.854%, from 3.747% late on Friday. The 30-year bond last rose 12 basis points to 3.9417% from 3.822%. The latest 2-year note rose 6.6 basis points to 4.3891% from 4.323%.

The dollar was almost flat on Tuesday as investors digested China news.

The dollar index, which measures the greenback against a basket of major currencies, was up 0.086 percent and the euro was up 0.04 percent at $1.0639.

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The Japanese yen weakened 0.49 percent against the greenback at $133.54, while Sterling last traded at $1.2026, down 0.28 percent on the day.

Marc Chandler, chief market strategist at Bannockburn Global Forex, said: “We are in a very tight trading range, and I think with the dollar strengthening against the euro and the yen, we could see more gains for the dollar against the Chinese currency. “

In energy futures, US crude oil fell 0.04% to $79.53 a barrel and Brent ended at $84.33 a barrel, up 0.49% on the day.

Gold prices rose to their highest level in six months on Tuesday as traders were optimistic about a decision by major consumer China to further ease COVID-19 restrictions.

Gold rose 0.8 percent to $1,812.58. The price of American gold increased by 1.12 percent and became 1,816.00 dollars.

(Reporting by Sinéad Carew in New York, Nell Mackenzie in London Additional reporting by Xie Yu and Ankur Banerjee Editing by Simon Cameron-Moore and Matthew Lewis)

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