NEW YORK (Reuters) – Stock and oil prices fell on Friday, under pressure from deepening lockdowns and weak retail sales data in the United States, while the dollar index fell. recorded its largest weekly increase in more than two months.
US bond yields and stocks have been rising recently, in part due to expectations about the deployment of coronavirus vaccines and a massive stimulus package from the new Democratic administration. President-elect Joe Biden on Thursday unveiled a $ 1.9 trillion economic aid package.
But vaccination campaigns have progressed more slowly than expected and the prospect of tighter lockdowns in France and Germany, as well as a resurgence of COVID-19 cases in China, weighed on market sentiment.
“I have a feeling that after all the optimism about vaccines, we are now living the reality of a very slow rollout, which is weighing heavily on business activity,” said Juan Perez, senior currency trader at Tempus Inc in Washington.
“Until we have more guarantees on the medical front, the markets will not continue to thrive despite the financial aid that may be on the way,” Perez said.
The dollar gained ground against the euro and the pound sterling, while the yen was little changed.
Shares fell but remained close to recent highs, with investors also digesting the prospect of higher taxes to pay for Biden’s plan.
“The expenses are easy to do, but the question is, how are you going to pay them? Markets often ignore politics, but they don’t often ignore taxes, ”said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
The Dow Jones Industrial Average fell 177.26 points, or 0.57%, to 30,814.26, the S&P 500 lost 27.29 points, or 0.72%, to 3,768.25 and the Nasdaq Composite fell by 114.14 points, or 0.87%, to 12,998.50.
The pan-European STOXX 600 index lost 1.01% and the MSCI gauge of equities around the world lost 0.86%.
Emerging market equities lost 0.93%. The largest MSCI index for Asia-Pacific stocks outside of Japan closed 0.67% lower, while Nikkei futures fell 2.01%.
Yields were also reduced by a lower than expected reading from US retail sales.
“This morning’s disappointing retail sales figures have reinforced the idea that more stimulus is needed,” said Ian Lyngen, head of US rate strategy at BMO Capital Markets in New York.
US 10-year notes last rose 13/32 to yield 1.0852%, compared to 1.129% on Thursday night.
Despite the weekly decline in the benchmark yield, it was set to close a second week above 1%, a streak not seen since before lockdowns set in early last year.
Oil prices have fallen sharply over fears demand will be weaker as COVID-19 continues to rage around the world.
“The recent upsurge in coronavirus infections, the emergence of new variants, the delay in vaccine deployment and the renewal of lockdown measures in most of the major OECD economies have clouded the economic and demand recovery”, said Stephen Brennock of oil broker PVM.
US crude recently fell 2.73% to $ 52.11 a barrel and Brent was at $ 54.87, down 2.75% on the day.
The dollar index rose 0.573%, the euro was down 0.68% to $ 1.2073, while the pound was last traded at $ 1.3585, down 0, 75% on the day.
The Japanese yen weakened 0.07% against the greenback to 103.88 per dollar.
Spot gold fell 1.1% to $ 1,826.59 an ounce. Silver fell 3.11% to $ 24.74.
Bitcoin last fell 7.59% to $ 36,164.50.
Reporting by Rodrigo Campos; Additional reporting by Lucia Mutikani in Washington and Sinead Carew, Karen Brettell, Jessica Resnick-Ault and Saqib Iqbal Ahmed in New York; Editing by Nick Zieminski, Cynthia Osterman and Sonya Hepinstall