TOKYO – (AP) – Asian stocks fell on Thursday, following a weak start to 2024 on Wall Street as Japan's markets reopened.
In Tokyo, the mood of sadness was clear as the market began the year with a moment of silence instead of ringing the New Year's celebration bells after a major earthquake left at least 77 dead and dozens missing.
Dark-clad officials bowed their heads on a stage, instead of the usual women dressed in colorful kimonos. Japan's benchmark Nikkei 225 index fell 1.2% to 33,048.58.
Hong Kong's Hang Seng lost 0.6% to 16,542.19 and the Shanghai Composite Index sank 1% to 2,938.35.
Australia's S&P/ASX 200 fell 0.4% to 7,493.00. South Korea's Kospi fell 0.8% to 2,585.77.
Stocks fell on Wall Street as a slow start to the year stretched into a second day.
The S&P 500 lost 0.8% to 4,704.81, although it remains within 2% of its record set exactly two years ago. The Dow Jones Industrial Average fell 0.8%, from its own record to 37,430.19. The Nasdaq Composite led the market lower with a 1.2% drop to 14,592.21.
Some of last year's biggest winners gave back some of their gains to weigh on the market. Tesla fell 4% after more than doubling last year, for example. This and the six other “Magnificent 7” Big Tech stocks, responsible for most of Wall Street's returns last year, have pulled back a bit after their tremendous runs.
A pair of reports released Wednesday morning indicated that the broader economy may be slowing from its strong growth last summer, which the Federal Reserve hopes will keep inflation in check. The risk is that it could slow down too much.
A report showed American employers Nearly 8.8 million job openings were announced at the end of November, slightly fewer than the previous month and the lowest number since the beginning of 2021. The report also showed that slightly fewer workers quit their jobs during November. .
The Federal Reserve is seeking exactly that cooldown, which it hopes will limit upward pressure on inflation without the need for widespread layoffs.
"This data will be good news for policymakers," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
A second report from the Institute for Supply Management showed that U.S. manufacturing is improving slightly more than economists expected, but is still contracting. Manufacturing has been one of the hardest hit areas of the economy recently, while the labor market and American household spending have remained resilient.
Treasury yields plunged immediately after the reports and then rose throughout the day. The 10-year Treasury yield eventually fell to 3.91% from 3.94% late Tuesday. Overall, it has been falling since topping 5% in October, when it was putting strong downward pressure on the stock market.
Traders are largely betting that the first interest rate cut could come in March, and put a high probability that the Federal Reserve will reduce its main rate by at least 1.50 percentage points during 2024, according to data from the CME Group. The federal funds rate is currently within a range of 5.25% to 5.50%.
Even if the Federal Reserve manages to land a smooth landing away from high inflation without causing an economic recession, some critics also say the stock market has simply gone too far, too fast in recent months and is due for at least a pause. your pace. run.
In energy trading, benchmark U.S. crude added 25 cents to $72.95 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.32 a barrel on Wednesday as concerns grew about the risk that the war between Israel and Hamas could spread to other parts of the Middle East.
Brent crude, the international standard, added 14 cents to $78.39 a barrel.
In currency trading, the US dollar fell to 143.28 Japanese yen from 143.29 yen. The euro was worth $1.0928, down from $1.0922.
___
AP Business Writer Stan Choe contributed.
Yuri Kageyama is in X https://twitter.com/yurikageyama
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
