US Stocks Mixed After Chinese Rate Hike

28 Dec

NEW YORK – Amid light trade, markets in snow-battered New York closed mixed Monday as China's decision to further hike interest rates soured the festive mood.

Beijing's move to temper inflation forced the Dow Jones Industrial Average 18.46 points lower (0.16 percent) to 11,555.03 points at the close.

Investors were digesting a decision Saturday by China's central bank to raise interest rates for the second time in less than three months as part of a campaign to curb borrowing, rein in property prices and tame inflation.

The move raised the prospect of slower Chinese growth, which has been vital to the global recovery.

“The unexpected rate hike by the People's Bank of China over the holiday weekend may temper equities heading into the new year,” said Moody's Analytics' Michael Bratus.

The broader S&P 500 index was up 0.77 points (0.06 percent) to 1,257.54 and the tech-rich NASDAQ rose 1.67 points (0.06 percent) to 2,667.27.

But not all sectors were hit.

“Consistent with the past couple of weeks, financials jumped out to an early lead and held their gains for the duration of the day,” said analysts at “the sector settled with a one percent gain.”

Citigroup shares rose 1.92 percent, while Bank of America and Goldman Sachs shares were both up over one percent.

Experts cautioned however that thin trade meant many price moves did not hold much meaning.

“Share volume was extraordinarily light this session — fewer than a half billion shares traded on the NYSE. Today's tally made for one of the most lightly traded sessions of the year,” said analysts.

US airlines, which have been forced to cancel thousands of flights because of bad weather in the northeast of the United States, saw their share prices mixed.

JetBlue shares rose 0.6 percent, US Airways was down 0.4 percent, while Delta shares were up 1.8 percent.

The bond market rose.

The yield on the 10-year Treasury bonds fell to 3.35 percent from 3.39 percent on Thursday, while that of the 30-year bond was down to 4.42 percent from 4.48 percent. Bond prices and yields move in opposite directions.

– AFP /ls

Channel News Asia


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