Asian stocks sink after Wall St rises

Tuesday, March 2, 2021 | Joe Mcdonald, AP Business Writer


A man walks past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange in Hong Kong Tuesday, March 2, 2021. Asian stock markets were mixed Tuesday after Wall Street rose as investor concern about possible higher interest rates receded. (AP Photo/Vincent Yu)

BEIJING (AP) — Asian stock markets declined Tuesday after Wall Street rose as a wave of investor concern about possible higher interest rates receded.

Tokyo, Shanghai, Hong Kong and Sydney declined. Seoul advanced.

Overnight, Wall Street's benchmark S&P 500 index climbed 2.4%, recovering most of its losses from the past week.

That came after a selloff in U.S. Treasury bonds eased. That helped to assuage investor concerns that the cost of borrowing might rise, putting downward pressure on the U.S. economic recovery.

“Asian markets appear to be taking a breather this morning, having led the global equity recovery yesterday,” Jeffrey Halley of Oanda said in a report.

Also Tuesday, Australia's central bank left its policy unchanged at its March meeting.

Meanwhile, Japan reported employment rose despite a state of emergency to cope with renewed coronavirus outbreaks and South Korea reported higher factory output.

The Shanghai Composite Index lost 1.5% to 3,497.78 and the Nikkei 225 in Tokyo declined 0.9% to 29,384.85. The Hang Seng in Hong Kong declined 1.5% to 29,020.46.

The Kospi in Seoul advanced 0.4% to 3,024.16 after the government reported factory production increased by a better-than-forecast 7.5% in January over a year earlier, up from December's 2.5%.

The S&P-ASX 200 in Sydney was off 0.4% at 6,762.30. India's Sensex opened up 0.4% at 50,021.56. New Zealand and Southeast Asian markets rose.

On Wall Street, the S&P 500 rose to 3,901.82 in its biggest single-day gain since June 5. The Dow Jones Industrial Average gained 2% to 31,535.51. The Nasdaq composite climbed 3% to 13,588.83.

The yield on the 10-year Treasury, or the difference between its market price and the payout if an investor holds it to maturity, fell to 1.43% after reaching its highest level in more than a year last week.

Stocks turned lower in late February after a rapid rise in bond yields, caused by a fall in their market price, fueled concerns about higher inflation. The yield on the 10-year Treasury note climbed as high as 1.5%. It was at 1.41% on Tuesday.

Bond yields influence rates on mortgages and other borrowing.

They have climbed as investors bet coronavirus vaccination efforts would get economic growth back on track. That fueled concerns about inflation and prompted investors to move money out of bonds and into stocks and other assets that do better when consumer prices rise.

Investors are looking for more information about the U.S. economic outlook when Federal Reserve officials deliver speeches this week. Lael Brainard, an advocate for looser monetary policies, will give a monetary policy speech on Tuesday and Fed Chair Jerome Powell speaks Thursday.

They also are watching Washington after the House of Representatives approved President Joe Biden's $1.9 trillion economic aid package early Saturday and sent it to the Senate. It includes one-time payments to the public and aid to struggling businesses and local governments.

Johnson & Johnson rose 0.5% after the Food and Drug Administration approved the company's coronavirus vaccine, one that does not require extremely cold refrigeration like the ones made by Moderna and Pfizer.

In energy markets, benchmark U.S. crude fell 79 cents to $59.85 per barrel in electronic trading on the New York Mercantile Exchange. The contract sank 86 cents to $60.64 on Monday. Brent crude, used to price international oils, retreated 81 cents to $62.88 per barrel in London. It declined 73 cents the previous session to $63.69 per barrel.

The dollar advanced to 106.85 yen from Monday's 106.81 yen. The euro fell to $1.2021 from $1.2047.

Featured Article: What is an inverted yield curve?



7 Hotel Stocks Just Waiting For the Vaccine

Like any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.

Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.

All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.

Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.

View the "7 Hotel Stocks Just Waiting For the Vaccine".


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Pfizer (PFE)2.3$38.57+2.6%4.04%24.88Hold$38.57
Johnson & Johnson (JNJ)2.7$162.24+1.2%2.49%25.51Buy$182.62
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