Daily market review

United States

Uncertainty and skepticism over US fiscal stimulus talks and unease over rising coronavirus cases left markets flat to weaker Wednesday. The Dow Jones industrial index eased 0.4 percent, the S&P 500 slipped 0.2 percent, and the NASDAQ was off 0.3 percent.

Strength in megacaps limited the index declines as internet-based communications services businesses advanced after blowout third-quarter earnings from Snap, the social media company, up 28 percent. Snap's results powered a rally in other advertising-based online businesses, including Facebook, up 4.2 percent, Twitter, up 8.4 percent, and Google, up 2.4 percent.

Among sectors, energy was the big loser as oil prices dropped on bearish US oil inventories data. Other laggards included finance, transports, leisure, aerospace & defense, consumer discretionary, and biotech. Holding up better were technology and consumer staples, led by gains in tobacco and cosmetics shares.

AstraZeneca shares fell 1.2 percent on news that a Brazilian volunteer in its Covid-19 vaccine trials had died. Netflix dropped 7 percent after reporting a miss on earnings and slowing subscription growth.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$1.27 to US$41.70 while spot gold rose US$14.43 to US$1,924.56. The US dollar declined sharply against major currencies. The US Treasury 30-year bond yield rose 2 basis points to 1.62 percent while the 10-year note yield was up 3 basis points at 0.82 percent.


Rising coronavirus cases and tightening government restrictions hit equities again Wednesday. The Europe-wide STOXX 600 declined 1.3 percent, the German DAX fell 1.4 percent, the French CAC lost 1.5 percent, and the UK FTSE-100 was off 1.9 percent.

Stocks saw losses nearly across the board on news of a national lockdown in Ireland, more limits on movement in the UK, France, Italy, Belgium, and Switzerland, and expectations for France to extend its state of emergency. Markets appeared to overlook better news in the Brexit saga, as the UK and EU were set to resume their talks.

Among sectors, worst off were travel & leisure, construction, oil & gas, real estate, health care, food & beverage, and industrials, financials, and technology. Holding up best were basic resources, telecom, media, and chemicals.

Earnings news came in mixed, with Nestle raising its full-year guidance but still ending down 0.8 percent. Assa Abloy, the Swedish lock maker, fell 5.1 percent and Danish biotech Novozymes dropped 5.4 percent on disappointing quarterly results.

Asia Pacific

Most major Asian markets closed higher Wednesday, with a bare regional data calendar keeping the focus on external events, including negotiations on a US fiscal deal and a EU-UK trade deal.

Japan's Nikkei and Topix indices closed up 0.3 percent and 0.7 percent respectively, while Hong Kong's Hang Seng index outperformed with an increase of 0.8 percent, with shares of airline Cathay Pacific posting a strong gain after announcing a major restructuring.

Moves elsewhere in the region were more subdued, with Australia's All Ordinaries index closing up 0.1 percent and the Shanghai Composite index closing down 0.1 percent.

Looking ahead*

On Thursday in Europe, German Gfk consumer climate, French business climate, Eurozone EC consumer confidence, and UK CBI industrial trends reports are due. In North America, US jobless claims, US leading indicators, and the Kansas City Fed manufacturing index are on tap.

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