Stocks Wobble as Investors Seek Shelter In Bonds
By Avantika Chilkoti and Xie Yu
U.S. stocks wobbled between small gains and losses, while
investors moved into the safety of government bonds as jitters
mounted about the recovery from Covid-19 lockdowns.
The Dow Jones Industrial Average ticked up 0.2% in morning
trading. The S&P 500 fell less than 0.1%, while the
technology-heavy Nasdaq Composite declined 0.4%.
Global investors appeared to grow increasingly concerned about
the impact of the coronavirus spread in the U.S. on the economic
outlook and sought shelter in government bonds. The yield on the
30-year Treasury fell to 1.281%, and the yield on the 10-year
Treasury hit 0.595%, both having reached their lowest levels since
April before recovering slightly.
"At some stage you accept the reality that Covid hasn't gone
away, that it's going to have an impact on all economies in terms
of social distancing until we have a vaccine," said Brian O'Reilly,
head of market strategy for Mediolanum International Funds.
Technology stocks in the S&P 500, which have performed
strongly this year, were the index's worst-performing sector
Friday, falling 0.7%.
Energy and financials were the S&P 500's best performers,
rising 1.4% and 1.1%, respectively. Energy stocks getting a boost
from an uptick in oil prices. U.S. crude futures rose 0.5% to
$39.83 a barrel.
BioNTech, a German biotech firm that has partnered with Pfizer
to develop a coronavirus vaccine, rallied after its chief executive
told The Wall Street Journal that early data for its vaccine was
promising and it could seek regulatory approval by the end of the
year. American depositary receipts of BioNTech were recently up
Overseas, European stocks were trading higher, with the Stoxx
Europe 600 index up 0.5%. Asian markets were mostly lower as
China's recent market rally lost steam.
In China a streak of stock market gains ended Friday, with the
Shanghai Composite Index closing nearly 2% lower. It had risen
16.5% over eight straight sessions of gains, the biggest eight-day
percentage gain since March 2008, according to Dow Jones Market
Perhaps seeking to avoid a repeat of the stock market bubble and
bust of 2015, Chinese authorities have signaled concerns about
overshooting, with a state-run financial newspaper stressing the
importance of long-term investment.
Friday's fall may have been propelled by actions by state-owned
investors. Filings showed that big players such as the National
Council for Social Security Fund had unloaded stocks, according to
Alvin Ngan, strategist at Zhongtai International Holdings, a Hong
"The cooling tone from the authorities could take some of the
sheen off the frenetic market, " he said.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Xie
Yu at Yu.Xie@wsj.com
(END) Dow Jones Newswires
July 10, 2020 10:40 ET (14:40 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.