* Nasdaq opens down 0.6% after setting all-time high
* Oil and industrial prices drop as risk appetite dies
By Pete Schroeder
WASHINGTON, June 9 (Reuters) - A recent run of optimism in
markets hit the brakes on Tuesday, as investors pulled back from
stocks in the U.S., while turning their attention to safe-haven
assets like gold.
Asian equities scored their ninth day of gains after
landmark highs by Wall Street on Monday .N , but Europe's big
markets opened with a lurch and were 1.1% in the red by the time
a bumpy U.S. start to Tuesday trading began. .EU .N
The Dow Jones Industrial Average .DJI fell 0.5%, while the
benchmark S&P 500 .SPX and Nasdaq Composite .IXIC were both
down 0.6% at the opening bell.
The return to positive territory for the key S&P 500 was
psychologically significant for investors and provided a reason
to take profit or sell positions they've held, said Rick
Meckler, a partner at family office Cherry Lane Investments, in
New Vernon, New Jersey.
“Upon further reflection some people decided, ‘OK, that's a
pretty good run given all that's happened',” Meckler said.
“It's hard for the retail investor, for the institutional
investor as well, to understand how the market can be back to
where it started (the year), given the damage that's been caused
to the economy.”
Attention now turns yet again to the U.S. Federal Reserve,
which kicks off a two-day meeting on Tuesday, and no major
policy announcements are expected when it wraps on Wednesday.
The central bank will, however, issue its first economic
projections since December, as it attempts to gauge the economic
cost of widespread pandemic-related lockdowns to curb the spread
of the new coronavirus.
MSCI's gauge of stocks across the globe .MIWD00000PUS fell
0.7% and the pan-European STOXX 600 index .STOXX was down 1.4%
at the U.S. market open. .EU .N
The euro dipped 0.1% EUR= in only its second drop in 11
days, safe bonds were back in favor, while another barb from
China in its spat with Canberra saw the Aussie dollar AUD=D3
drop 1.3%, having only just set a 10-month high. /FRX
The optimism for equity markets came last week after U.S.
jobs data showed a sharp decline in the unemployment rate. Wall
Street indices surged, with the Nasdaq .IXIC closing at a
record level on Monday. .N
Global markets were mauled in March amid concern over both
the short- and longer-term damage to the world economy from the
coronavirus pandemic. But most indices are now back to
pre-COVID-19 levels.
Fears of renewed trade tensions between the United States
and China and the second-round impact from higher unemployment
and bankruptcies are hanging over the outlook, however.
In its latest Global Economic Prospects report on Monday,
the World Bank said advanced economies are expected to shrink
7.0% in 2020, while emerging-market economies will contract
2.5%, their first slump since aggregate data became available in
1960. On a per-capita gross domestic product basis, the global
contraction will be the deepest since 1945-46, when World War
Two spending dried up.
BEARS BITE BACK
Tuesday's wobble in markets saw the safe-haven Japanese yen
head as high as 107.93, while the U.S. dollar's gains elsewhere
saw the greenback index make its best spurt since May 22.
Big emerging market currencies such as China's
internationally traded yuan CNH= , Brazil's real BRL= and
Turkey's lira TRY= backpedalled, while Europe's stocks were
led down by a 3.3% drop in eurozone bank shares .SX7E after a
six-day run of gains. EMRG/FRX .EU
The mood shifted in commodity markets, too.
Oil prices LCOc1 slipped over 1.1% in London after Brent
had hit its highest in more than three months at $41 a barrel
CLc1 . Gold flipped higher as industrial metals copper, nickel
and aluminum all fell. MET/L
"While OPEC+'s historic agreement was extended, Gulf
nations' extra voluntary production cut — a massive 1.2m bpd
according to Prince Abdulaziz bin Salman — will also end this
month," said commodity strategists at TD Securities.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
Global markets vs COVID-19 https://tmsnrt.rs/2YilqMX
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