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Wednesday Dec 06 2017
By
REUTERS

Wall Street wanes as tech rebound fades; copper dulls

By
REUTERS

Wall Street pulled back on Tuesday as a technology stock rebound lost steam and enthusiasm from a tax-cut proposal waned, while copper prices fell steeply to their lowest point in two months.

The US Treasury yield curve flattened, with the difference between the yields on five- and 30-year debt hitting its lowest in a decade.

A flatter yield curve is often an sign of worries about the economy, while market watchers also pointed to the drop in copper, which is an indicator of global demand, as another potential broader concern.

Wall Street’s main indexes closed lower. Investors have been switching their bets among sectors in recent days capitalise on a US tax-cut package moving swiftly through Congress.

“We are still trying to sort out the winners and losers under tax legislation,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

Meanwhile, Tuz said, investors may be selling their stock winners from this year’s record-setting rally “to lock some of that in or diversify some of it away into things that had not done as well.”

The Dow Jones Industrial Average .DJI fell 109.41 points, or 0.45 percent, to 24,180.64, the S&P 500 .SPX lost 9.87 points, or 0.37 percent, to 2,629.57 and the Nasdaq Composite .IXIC dropped 13.15 points, or 0.19 percent, to 6,762.21.

The S&P technology sector .SPLRCT, which has lost momentum in recent days, rose 0.2 percent and was the only major group to end in positive territory. But the sector finished well below its session highs.

Investors have been selling technology shares recently, bidding up prices for banks, telecoms and transports in a rotation into groups expected to particularly benefit from passage of US bill designed to slash corporate taxes.

The Republican-controlled US House of Representatives voted on Monday to go to conference on tax legislation with the Senate, moving Congress another step closer to a final bill.

In Europe, the pan-European FTSEurofirst 300 index .FTEU3 lost 0.12 percent, after posting its biggest gain in more than a month on Monday.

Europe’s STOXX 600 technology index .SX8P rose 0.6 percent.

MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.31 percent.

Copper CMCU3 lost 4.31 percent to $6,531.50 a tonne as inventories rose, its biggest single-session decline in more than two years. Other metals, such as nickel CMNI3 and zinc CMZN3, also fell.

Copper prices were also pressured by recent strength in the dollar, with many commodities denominated in the US currency.

“Today is copper traders questioning whether or not global growth is as strong as they were thinking,“ said William Delwiche, investment strategist at Baird in Milwaukee. ”They are looking at the inability of bond yields to make a sustained move higher and causing them to question the strength in the economy.”

The dollar rose for a second straight session as the currency continued to benefit from optimism surrounding US tax reform.

The dollar index .DXY rose 0.12 percent, with the euro EUR= down 0.33 percent to $1.1825.

Benchmark 10-year notes US10YT=RR last rose 7/32 in price to yield 2.3545 percent, from 2.379 percent late on Monday.

Oil rose, supported by strong demand, expectations of a drop in US crude inventories and an OPEC-led deal to extend oil output cuts.

US crude CLcv1 rose 0.38 percent to $57.69 per barrel and Brent LCOcv1 was last at $62.94, up 0.78 percent on the day.

Spot gold XAU= dropped 0.7 percent to $1,266.63 an ounce.

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