After a Wall Street retreat, Asian shares tumbled Thursday as banks and healthcare companies pulled the Dow Jones Industrial Average and the S&P 500 back from record highs.
All major regional markets saw shares fall, and oil prices fell as well.
Seoul’s Kospi fell 0.1% to 3,024.04, Samsung Electronics posted its highest quarterly profit in three decades thanks to strong demand for its computer memory chip products.
Samsung’s dual strengths in parts and finished products have allowed it to thrive during the pandemic when millions were forced to work from home. However, the company said it was dealing with “longer-than-expected” component shortages that may affect the demand for semiconductors during the current quarter.
Tokyo’s Nikkei225 index fell 0.9% to 28825.62. At its Thursday policy meeting, the Bank of Japan was expected not to change its monetary policy.
The Hang Seng in Hong Kong rose 0.3% to 25,550.84 while the Shanghai Composite index fell 1% to 3,528.63. S&P/ASX 200 lost 0.5% to 7,408.40
The emergence of coronavirus cases in China and Singapore was a worrying sign for the economy’s outlook. There are signs that inflationary trends could lead central banks to take a more aggressive stance to tighten their monetary policy.
New York investors focused on mixed earnings from a variety of well-known companies like Microsoft, General Motors, and Coca-Cola.
S&P 500 fell 0.5% to 4,551.68. The benchmark index saw more than three quarters of companies fall, with the majority of the decline being in financial, industrial, and health care stocks. These losses were offset by gains in communication stocks and a mixture of companies that depend on consumer spending.
The Dow Jones Industrial Average fell 0.7% to 35.490.69. It and the S&P 500 both reached record highs yesterday.
The blue-chip index’s shares were mostly in red. Visa led the charge, dropping 6.9% after it reported strong quarterly results.
The Nasdaq gained 0.1% to 15,235.84. Russell 2000, an index of small businesses, suffered the largest losses, dropping 1.9% to 2,252.49.
The long-term yields on bonds fell dramatically and weighed down banks. Banks rely on higher yields for more lucrative loans. From 1.61% on Tuesday, the yield on the 10-year Treasury fell from 1.53% to 1.53%. The yield was stable at 1.55% on Thursday morning.
The yield on the Treasury’s 30-year Treasury fell to 1.96% for the first month, despite the fact that rates on shorter-term bonds like the Treasury note are rising.
U.S. crude oil prices dropped 2.4%, pushing energy stocks lower. Exxon Mobil dropped 2.6%.
U.S. benchmark crude oil lost $1.86 to $80.80 a barrel. Brent crude, which is the base for international pricing, fell $2.12 to $81.75 a barrel.
With industrial giant Caterpillar and tech giant Apple, the steady stream of corporate reports cards will continue on Thursday. On Thursday, Amazon and Starbucks will report their results.
Investors will also get updates on U.S. economy growth as the Commerce Department releases its third-quarter gross domestic products report on Thursday.
Investors are concerned about rising inflation as they watch earnings and assess the impact of supply chain problems and higher prices for consumers and businesses. Investors also look forward to next week’s Federal Reserve meeting to see how the Federal Reserve moves with its plans to reduce bond purchases and to change its position on interest rate.
Although the central bank maintained that inflation would be temporary and linked to economic recovery, it has been more persistent then initially expected.
Other trading saw the dollar fall to 113.62 Japanese Yuen, from 113.83. From $1.1603, the euro rose to $1.1609
