Stocks Pare Losses as Tech Rally Tempers Bank Rout: Markets Wrap

(Bloomberg) -- Stocks pared losses as a rebound in some tech giants tempered concern over cloudy prospects for economic stimulus and a report about suspicious transactions at global banks. Bonds and the dollar rose.

After approaching the threshold that many investors consider to be a market correction, the S&P 500 came off session lows as the Nasdaq 100 climbed. Commodity and industrial shares still led the benchmark gauge to its lowest in almost two months. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. slumped more than 2%. Carnival Corp. and American Airlines Group Inc. paced losses in travel companies on worries that an increase in coronavirus cases could prompt further lockdown measures.

The eruption of a partisan battle over replacing Supreme Court Justice Ruth Bader Ginsburg damaged already-slim prospects for another round of fiscal stimulus. Speaker Nancy Pelosi and House Democrats released a stopgap government funding bill without support from the White House or Senate Republicans. Federal Reserve Chairman Jerome Powell said the economy is improving, but has a long way to go before a full recovery from the pandemic. Former Food and Drug Administration Commissioner Scott Gottlieb warned the U.S. may experience “at least one more cycle” of the virus in the fall and winter.

Meanwhile, a new investigation by the International Consortium of Investigative Journalists said some big global banks “kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties.

“Maybe there are worries we will see another wave of lockdowns. We also have U.S. political risk rising,” according to Jeffrey Kleintop, chief global investment strategist at Charles Schwab Corp. “There are some concerns there could be more fines in place on financial-services institutions,” and that could further hit earnings estimates, he said.

These are some of the main moves in markets:

Stocks

• The S&P 500 dipped 1.2% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index sank 3.2%.
• The MSCI Asia Pacific Index slid 1%.

Currencies

• The Bloomberg Dollar Spot Index jumped 0.6%.
• The euro sank 0.7% to $1.1763.
• The Japanese yen weakened 0.1% to 104.72 per dollar.

Bonds

• The yield on 10-year Treasuries dipped two basis points to 0.67%.
• Germany’s 10-year yield fell five basis points to -0.53%.
• Britain’s 10-year yield declined three basis points to 0.157%.

Commodities

• West Texas Intermediate crude fell 3.6% to $39.64 a barrel.
• Gold depreciated 2.1% to $1,910.78 an ounce.
• Silver sank 8% to $24.63 per ounce.

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