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Wall St falls as U.S. crude oil shakes off losses

Stock Markets Nov 28, 2022 04:41PM ET
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© Reuters. FILE PHOTO: A view of a giant display of stock indexes, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China, October 24, 2022. REUTERS/Aly Song/File Photo
 
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By Sinéad Carew and Lawrence White

NEW YORK/LONDON (Reuters) - Wall Street equities deepened losses on Monday while U.S. oil futures reversed course to settle higher on production rumors after starting the day mired in worries that China's strict COVID-19 restrictions would stunt global economic growth.

While a surge in COVID cases and clashes between police and protesters across several major Chinese cities over the weekend helped push U.S. Treasury yields lower, that move had also reversed course in afternoon trading.

"The China protest news was the source of market sentiment souring this morning but we're also coming off a strong few weeks," said Mona Mahajan, senior investment strategist at Edward Jones, referring to stock trading. The Dow Jones industrial average for example had risen more than 10% in the last month and almost 20% since September.

"Some of this is just a bit of consolidation from the last few weeks," she said, noting that stocks had taken a leg lower when Treasury yields gained and oil prices switched from red to green on Monday as the prospect of higher oil prices brought inflation concerns back to the forefront.

Along with inflation trends, investors are also monitoring Federal Reserve commentary for any clues on its future rate hiking path. While New York Federal Reserve President John Williams declined to say how far and fast he believes the central bank will need to hike rates in coming months he said that it could be 2024 before rates are cut.

The Dow Jones Industrial Average fell 497.57 points, or 1.45%, to 33,849.46, the S&P 500 lost 62.17 points, or 1.54%, to 3,963.95 and the Nasdaq Composite dropped 176.86 points, or 1.58%, to 11,049.50.

MSCI's gauge of stocks across the globe shed 1.42%. Emerging market stocks lost 1.13%.

Earlier, U.S. crude oil futures had fallen to December 2021 levels on concerns about demand in China - the world's biggest crude importer.

But the commodity since regained lost ground on speculation ahead of the Dec. 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+. In October, OPEC+ agreed to reduce its output target by 2 million barrels per day through 2023.

U.S. crude settled up 1.26% at $77.24 per barrel and Brent settled at $83.19 a barrel, down 0.5% on the day but still well below its trough of the day.

In currencies, the dollar rose against the euro after earlier falling as both U.S. and European policy makers sounded hawkish tones.

European Central Bank President Christine Lagarde on Monday hinted at a series of interest rate hikes ahead, saying euro zone inflation has not yet peaked and risks turning out even higher than current expectations.

The dollar index rose 0.339%, with the euro down 0.59% at $1.0334.

The Japanese yen strengthened 0.14% versus the greenback at 138.90 per dollar, while Sterling was last trading at $1.1951, down 1.17% on the day.

Treasury prices swung around during the session with Fed speakers pushing back on the notion that the U.S. central bank could soon cut interest rates to revive the economy.

Benchmark 10-year notes were down 1.3 basis points at 3.689%, from 3.702% late on Friday.

Earlier, China announced a fifth consecutive day of record new local COVID-19 cases with 40,052 infections on Monday, while in Shanghai demonstrators and police clashed on Sunday night.

Gold prices gave up gains after touching a one-week high of $1,763.70 per ounce. Spot gold dropped 0.9% to $1,740.72 an ounce. [GOL/]

(Reporting Sinéad Carew and Karen Brettell in New York, Lawrence White in London, Scott Murdoch in Sydney; Editing by Susan Fenton and Matthew Lewis)

Wall St falls as U.S. crude oil shakes off losses
 

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Comments (5)
Slabodan Milosevic
humanfallibility Nov 28, 2022 3:20PM ET
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"Free people around the world hear me. Please do not recognize this Regime. it is not loyal to any of its principles, religious or otherwise. It does not know any laws or rules except force & maintaining its power in any way possible." That was the niece of the Ayatollah talking about Iran- Moradkhani. BUT I thought the quote was about the USA but it could have been CHINA. We gotta revolt before this shitshow gets itself a real despot (not some self-loving *******gurgler like Trump) but one whose capable with more than a fifth-grade vocabulary. We gotta fix (US)A because the next ***strike from abroad SHOULD BE WELCOMED
Mohammad Abdullah
Mohammad Abdullah Nov 28, 2022 11:10AM ET
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My opinion lockdown 5 days 100 percent.
Tom Michaels
Tom Michaels Nov 28, 2022 5:28AM ET
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Screw China and all of the bull.
Stephen Fa
Stephen Fa Nov 27, 2022 9:47PM ET
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Left wing commies always sour sentiment.
Chip Sullivan
Chip Sullivan Nov 27, 2022 9:47PM ET
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Which country?
Salvador Hernández Sánchez
Salvador Hernández Sánchez Nov 27, 2022 8:08PM ET
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The news in china says never covid exists…… only was manupulation for cheap oil ….. from 130 usd to 74 usd
Sofyan elm
Sofyan elm Nov 27, 2022 8:08PM ET
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If they dont do anything this will go to 50-55 range
 
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