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Financial Markets 12/01 09:32
NEW YORK (AP) -- U.S. stocks are giving back some of last week's rally on
Monday, as bitcoin and other former stars of Wall Street fall again.
The S&P 500 slipped 0.4% and was threatening to break a five-day winning
streak. The Dow Jones Industrial Average was down 204 points, or 0.4%, as of
10:15 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.
Last week's rally was largely due to strengthening hopes that the Federal
Reserve will cut its main interest rate at its meeting next week to help shore
up the slowing job market. Such hopes are still high, with traders betting on a
nearly 88% chance of it, according to data from CME Group.
But yields for longer-term Treasurys nevertheless rose in the bond market on
Monday. It was part of a worldwide climb for yields after the head of the Bank
of Japan hinted at a possible hike to interest rates there.
When bonds are paying higher yields, they can attract investors who
otherwise would buy stocks or cryptocurrencies. Higher yields undercut prices
for all kinds of investments, and they particularly hurt those seen as the most
expensive.
Bitcoin, which was soaring around $125,000 in October, dropped below
$86,000. That's down more than 5% from a day earlier.
That in turn sent stocks lower across the crypto industry. Coinbase Global
sank 3.7%, and Robinhood Markets fell 4.6%, for example.
Strategy, the company that used to be known as MicroStrategy and now raises
money just to buy bitcoin, lost 8%. It said that it's raised a fund of $1.44
billion in U.S. dollars, not in bitcoin, by selling stock in order to help pay
its dividends on preferred shares and interest on its debt.
On the winning side of Wall Street was Synposys, which rose 3.9%. It said
Nvidia is investing $2 billion in its stock as part of an expanded partnership
between the two. Nvidia, which has become Wall Street's most influential stock,
swung from an early loss to a modest gain of 0.9%.
The market, meanwhile, had a mixed reaction to what seems like a strong
start for the holiday shopping season. Consumer spending during the Black
Friday and Cyber Monday retailing bonanza was expected to exceed expectations,
despite uncertainty over the outlook for the U.S. economy.
Amazon rose 0.4%, but Best Buy fell 1.9%.
In stock markets abroad, indexes were mixed amid sharp moves.
France's CAC 40 fell 0.3%, dragged down in part by a 5.1% loss for Airbus.
The European aerospace giant said Monday that most of its fleet of 6,000
A320 passenger jets have received an update after a weekend software glitch
that could have affected flight controls. Travelers faced minor disruptions
heading into the weekend as airlines around the world scrambled to push the
software updates out after Airbus warned of the problem Friday, one of the
busiest travel days of the year.
In Japan, the Nikkei 225 tumbled 1.9% on worries about the possibility of
higher interest rates. Japan's benchmark interest rate has remained near zero
for years in hopes of juicing the economy. Now inflation is holding above the
Bank of Japan's target of about 2%.
In the bond market, the yield on the 10-year Treasury rose to 4.08% from
4.02% Friday.
It had briefly topped 4.09% earlier, but it pulled back after a report
showed activity for U.S. manufacturers shrank by more last month than
economists expected.
Jobs are under pressure at manufacturers, and the majority told surveryers
for the Institute for Supply Management that they're still more focused on
managing headcount than on hiring. Several manufacturers also said tariffs are
continuing to make conditions complicated.
"Conditions are more trying than during the coronavirus pandemic in terms of
supply chain uncertainty," one manufacturer told the ISM.
___
AP Business Writer Elaine Kurtenbach contributed.
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