Business

As bond prices rally, US stocks follow global shares lower

Global stocks fell on Thursday, tracking a slump in Asia in response to a widening crackdown on the tech sector in China and concern over the strength of the country's economic recovery, while oil prices sagged on supply uncertainty.

FILE PHOTO: A man points a computer screen showing stock information in this illustration photo tak
FILE PHOTO: A man points a computer screen showing stock information in this illustration photo taken in Bordeaux, France, March 30, 2016. REUTERS/Regis Duvignau/File Photo
(Updated: )

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LONDON/NEW YORK: U.S. treasuries were leading a broad-based bond rally on Thursday as concerns mounted about the strength of the economic recovery while inflation fears ebbed, with U.S. stocks following declines earlier across the globe. The dollar was weaker.

The burst of pessimism continued a pattern earlier in the week and comes as central bankers juggle concerns about the pace of economic recovery from the COVID-19 pandemic and its impact on inflation.

"The (bond market) bears have given up and thrown in the towel," said Chris Scicluna, head of economic research at Daiwa Capital Markets in London.

Around 1400 GMT, the yield on 10-year Treasury notes was down 4.3 basis points to 1.278per cent.

The moves follow a signal from the U.S. Federal Reserve on Wednesday that it had no immediate plans to tighten monetary policy, but would begin talking about it.

A reading on Thursday on the number of Americans filing new unemployment claims provided another indication that the job market recovery from the COVID-19 pandemic continues to be choppy.

U.S. stocks were down. The Dow Jones Industrial Average was off 399.59 points, or 1.15per cent, to 34,282.2, while the broad S&P 500 lost 54.88 points, or 1.26per cent, to 4,303.25. The tech-heavy Nasdaq Composite had dropped 215.26 points, or 1.47per cent, to 14,449.80.

Shares in Europe were down about 2per cent.

The dollar index was down 0.34per cent at 92.33.

Spot gold prices gained US$5.705, or 0.32per cent, to US$1,809.11 an ounce.

Brent crude was last down US$0.66, or 0.9per cent, at US$72.77 a barrel. U.S. crude was last down US$0.90, or 1.25per cent, at US$71.3 per barrel.

(Additional reporting by Tom Westbrook, Yoruk Bahceli and Brenna Hughes-Neghaiwi; editing by Kirsten Donovan, Angus MacSwan, Barbara Lewis, William Maclean and Sonya Hepinstall)

Source: Reuters