NEW YORK: Wall Street closed slightly higher on Tuesday (Dec 20) after four sessions of declines, but investors fretted about weak holiday shopping and rising bond yields added pressure after the Bank of Japan's (BOJ) surprise tweak of monetary policy.
The Dow Jones Industrial Average rose 92.2 points, or 0.28%, to 32,849.74, the S&P 500 gained 3.96 points, or 0.10%, to 3,821.62 and the Nasdaq Composite added 1.08 points, or 0.01%, to 10,547.11.
Among the S&P 500's 11 major sectors, the energy index gained most, finishing up 1.52% as crude oil prices rose.
Fears about the Federal Reserve’s plan to keep raising US interest rates have weighed heavily on equities since its policy meeting last week.
Adding pressure was an increase in US Treasury yields after the BOJ made a surprise tweak to its bond yield control that allows long-term interest rates to rise more.
“The Bank of Japan’s news moved the bond market and continues to have an impact,” said Chris Zaccarelli, chief investment officer, Independent Advisor Alliance, Charlotte, NC.
Investors were also worrying about the current quarter earnings season and winter holiday shopping.
“We came into it with some pretty reasonable expectations but retailers are having to do massive sales,” said Carol Schleif, deputy chief investment officer, BMO family office in Minneapolis, Minnesota noting that consumers this year are veering toward “services and events – vacation tickets and restaurant gift certificates and things like that – as opposed to another sweater or another bag.”
Schleif noted that investors are wary after a volatile year in equities with the S&P on track for its biggest annual decline since the 2008 financial crisis.
“People have gotten their heads handed to them all year and they’re not confident enough to want to step in,” she said.
“That’s what leads to this push me pull you kind of market where it’s up a little down a little and it’s really hard for any segment of the investing public to want to get to want to spin a narrative they would put a whole bunch of money behind.”
Tesla Inc shares tumbled 8% after at least three brokerages cut the electric vehicle maker’s target price on growing concerns of demand weakness and risk from chief executive Elon Musk’s struggles at Twitter.
For now, investors are shifting focus to companies that are reporting their results before the Christmas holiday, with Nike and FedEx expected to do so after the bell.
Market watchers will also be eyeing existing home sales data due Wednesday and readings for the Fed's preferred inflation measure expected on Friday. – Reuters, AFP