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World Shares Mostly Gain, Oil Slips 08/25 04:46
Shares were mostly higher Tuesday in Europe and Asia after U.S. stocks
drifted to a mixed finish ahead of potentially market-moving events later in
the week.
BANGKOK (AP) -- Shares were mostly higher Tuesday in Europe and Asia after
U.S. stocks drifted to a mixed finish ahead of potentially market-moving events
later in the week.
Oil prices fell back after U.S. Treasury Secretary Scott Bessent announced
fresh sanctions against Iran and warned that countries persisting in doing
business with the Islamic Republic would face retaliation.
Germany's DAX gained 0.5% to 26,240.76 and the CAC 40 in Paris added 0.3% to
8,480.52. Britain's FTSE 100 edged 0.1% higher, to 10,869.93.
The future for the S&P 500 was up 0.3% while that for the Dow Jones
Industrial Average rose 0.2%.
During Asian trading, Tokyo's Nikkei 225 gained 0.5% to 65,856.43. Shares in
technology investor SoftBank Group climbed 2.3%.
The Kospi in South Korea reversed early losses, gaining 0.7% to 6,742.74 as
traders resumed buying tech shares, snapping up bargains.
Hong Kong's Hang Seng was nearly unchanged at 25,511.10, while the Shanghai
Composite index picked up 0.2% to 3,889.44.
In Australia, the S&P/ASX 200 gained 0.7% to 9,164.60.
Taiwan's Taiex jumped 0.9%, while the Sensex in India lost 0.2%.
On Monday, areas of the bond market that the U.S. Treasury Department has
been trying to calm eased a bit, relieving pressure on stocks.
The S&P 500 slipped 0.3%, while the Dow industrials added 0.3%. The Nasdaq
composite fell 0.8%.
Tech stocks led the decline. They've had big swings recently due to worries
that the frenzy around artificial-intelligence technology has sent prices too
high and huge demand for AI chips will falter if AI doesn't yield enough
profits.
Chip giant Nvidia, a tremendous winner of the AI boom, lost 2.9% on Monday.
It will deliver its quarterly earnings report on Wednesday and that could
dictate the next big move for AI-related stocks. Micron Technology lost 5.8%
and Broadcom fell 2.6%.
In the bond market, the yield of the 10-year Treasury eased to 4.69% from
4.74% late Friday, returning to where it was last week before the U.S. Treasury
Department announced a surprise move to increase the size of its planned
buybacks of Treasurys.
Longer-term Treasury yields climbed through the summer on worries about high
inflation, huge government debts and other factors. High yields make it more
expensive for everyone to borrow, not just the government, and already have
pushed up mortgage rates and hurt the housing industry.
"The latest discussion about using Treasury General Account cash to help
finance purchases of longer-dated bonds gave the market something to chew on
Monday, and it initially liked the taste. Long yields fell, and the curve
flattened," Stephen Innes of SPI Asset Management said in a commentary.
"But there is a difference between forcing the bond market to blink for an
afternoon and solving the underlying problem," he said.
The Federal Reserve's new chairman, Kevin Warsh, is set to deliver a speech
Friday at an annual economic symposium in Jackson Hole, Wyoming, the backdrop
for past policy announcements.
Analysts say Warsh is likely to talk about inflation and how the Fed plans
to deal with it.
Oil prices are a major factor behind higher costs and Brent crude, the
international standard, has been trading above the $72 per barrel level it was
at before the war with Iran began in late February.
Early Tuesday, Brent crude fell 2% to $88.74 per barrel. U.S. benchmark
crude oil shed 2.2% to $83.14 per barrel.
Last month, Brent zigzagged between $72 and $102 as hopes rose and fell that
the United States and Iran could reach a deal that would allow oil tankers to
freely exit the Persian Gulf again. The new U.S. sanctions announced Monday
helped drag the value of Iran's currency, the rial, to a record low against the
U.S. dollar.
In other dealings, the U.S. dollar rose to 159.30 Japanese yen from 159.10
yen. The euro was trading at $1.1670, up from $1.1667.
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