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Stocks, debt yields edge up as Omicron fears ease

12/08/2021 | 04:34pm EST
FILE PHOTO: First trading day of stock market in Tokyo

NEW YORK (Reuters) -Global stock markets and Treasury yields edged higher on Wednesday as investors became less concerned about the Omicron coronavirus variant but sentiment cooled after the prior day's big rally in equities and crude oil prices.

Stocks closed lower across Europe but the three main U.S. indices closed up as drugmakers Pfizer and BioNtech said a three-shot course of their COVID-19 vaccine neutralized Omicron in a laboratory test.

The benchmark U.S. 10-year Treasury yield rose for a third straight day, climbing above 1.5% for the first time in a week, and gold prices were little changed as investors squared positions before Friday's release of U.S. consumer prices data.

Investors are carefully watching the effectiveness of existing vaccines on Omicron along with its severity and how infectious it is, according to Jeremy Leung, portfolio manager at UBS Asset Management in London.

"We also need to consider the time needed to adapt the vaccine, which would determine whether there is further disruption to the recovery ahead," Leung said, adding that Omicron could exacerbate supply chain difficulties.

"Rate expectations have fallen recently due to macro concerns and therefore caused growth versus value volatility along with general market volatility," Leung added.

MSCI's all-country world index rose 0.39% and the STOXX Europe 600 index fell 0.44%. The U.S. benchmark S&P 500 came less than 0.1% from a record close.

On Wall Street, the Dow Jones Industrial Average rose 0.10%, the S&P 500 gained 0.31% and the Nasdaq Composite advanced 0.64%. Communication services and healthcare led the S&P sectors higher, with growth shares rising 0.58% and value little changed.

The dollar slipped against several major currencies as easing concerns about Omicron helped support riskier currencies, with the Australian dollar rising 0.83%, on pace to notch a third straight session of gains.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.38% to 95.906. The euro rose 0.74% to $1.1346 and the yen added 0.10% at $113.68.

The yield on 10-year U.S. Treasury notes rose 4.8 basis points to 1.528%.

Longer-term yields had fallen recently as investors were unsure what Omicron would mean for the economy, said Kevin Flanagan, head of fixed income strategy at WisdomTree.

"If Omicron does fade a bit in the headlines you will continue to see all Treasury yields rising as we move forward," Flanagan said.

The yield on the 10-year Treasury note last week posted its biggest weekly drop since June 2020 after Federal Reserve Chair Jerome Powell took a more hawkish policy tone and Omicron concerns rattled markets.

The U.S. central bank is scheduled to hold its final policy meeting of the year next week, when an increased pace of tapering its bond purchases is widely expected.

London's FTSE 100 and the British pound were knocked by reports that Britain could implement tougher COVID-19 measures as early as Thursday.

Brent crude, the international benchmark, steadied above $75 a barrel in choppy trade, taking a breather after strong gains earlier this week.

Brent crude futures rose $0.38 to settle at $75.82 a barrel, while U.S. crude settled up $0.31 to $72.36 a barrel.

U.S. gold futures settled mostly unchanged at $1,785.50 an ounce.

Shares in China's Evergrande Group hit a record low after a missed debt payment deadline put the developer at risk of becoming the country's biggest defaulter. Analysts said the news produced limited global market impact because it was already "well-priced" by the market.

(Reporting by Herbert Lash, additional reporting by Elizabeth Howcroft and Joice Alves in London; Editing by Will Dunham, Alex Richardson, David Evans and William Maclean)

By Herbert Lash

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 6.98% 170.33 Delayed Quote.-4.08%
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) -0.72% 0.5216 Delayed Quote.-2.00%
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) -0.49% 0.89229 Delayed Quote.-2.16%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.61% 0.6273 Delayed Quote.-1.16%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.68% 80.594 Delayed Quote.-2.90%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.10% 1.06746 Delayed Quote.0.70%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) -0.66% 0.65057 Delayed Quote.-1.07%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.59% 0.6993 Delayed Quote.-3.10%
BELIEVE 1.65% 14.646 Real-time Quote.-13.33%
BIONTECH SE 4.97% 162.22 Delayed Quote.-37.08%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) 0.66% 1.91547 Delayed Quote.2.11%
BRITISH POUND / EURO (GBP/EUR) 0.01% 1.2014 Delayed Quote.0.97%
BRITISH POUND / JAPANESE YEN (GBP/JPY) -0.02% 154.383 Delayed Quote.-0.86%
BRITISH POUND / US DOLLAR (GBP/USD) 0.08% 1.3398 Delayed Quote.-1.05%
CANADIAN DOLLAR / AUSTRALIAN DOLLAR (CAD/AUD) 0.49% 1.120712 Delayed Quote.2.21%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) -0.27% 0.584501 Delayed Quote.0.20%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.19% 0.702657 Delayed Quote.1.10%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) -0.31% 90.202 Delayed Quote.-0.63%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.22% 0.7826 Delayed Quote.-0.83%
DEUTSCHE BANK AG -0.07% 11.912 Delayed Quote.8.11%
DJ INDUSTRIAL 1.65% 34725.47 Delayed Quote.-5.99%
DOW JONES AFRICA TITANS 50 INDEX -0.19% 530.61 Delayed Quote.-1.01%
DOW JONES FXCM DOLLAR INDEX 0.05% 12296.53 Delayed Quote.1.04%
DOW JONES SOUTH AFRICA(ZAR) 0.23% 1993.82 Delayed Quote.1.20%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) 0.58% 1.59324 Delayed Quote.1.20%
EURO / BRITISH POUND (EUR/GBP) -0.05% 0.83199 Delayed Quote.-0.94%
EURO / JAPANESE YEN (EUR/JPY) -0.07% 128.451 Delayed Quote.-1.76%
EURO / US DOLLAR (EUR/USD) 0.03% 1.1147 Delayed Quote.-1.99%
FTSE 100 -1.17% 7466.07 Delayed Quote.1.10%
GOLD -0.13% 1795 Delayed Quote.-1.75%
INDIAN RUPEE / AUSTRALIAN DOLLAR (INR/AUD) 0.84% 0.019058 Delayed Quote.2.17%
INDIAN RUPEE / BRITISH POUND (INR/GBP) 0.08% 0.009946 Delayed Quote.0.14%
INDIAN RUPEE / EURO (INR/EUR) 0.22% 0.011954 Delayed Quote.1.15%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) 0.20% 1.536122 Delayed Quote.-0.79%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.25% 0.013327 Delayed Quote.-1.01%
JAPANESE YEN / SWISS FRANC (JPY/CHF) 0.17% 0.8076 Delayed Quote.1.73%
LONDON BRENT OIL 0.70% 90.67 Delayed Quote.15.60%
META PLATFORMS, INC. 2.40% 301.71 Delayed Quote.-10.30%
MSCI WORLD 1.70% 3005.63 Real-time Quote.-7.80%
NASDAQ COMP. 3.13% 13770.573348 Real-time Quote.-11.98%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) -0.67% 75.431 Delayed Quote.-3.55%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.64% 0.65402 Delayed Quote.-3.70%
PFIZER, INC. 1.80% 54.33 Delayed Quote.-7.99%
S&P 500 2.43% 4431.85 Delayed Quote.-9.22%
S&P AFRICA 40 INDEX -0.37% 172.73 Delayed Quote.0.13%
S&P GSCI BRENT CRUDE INDEX 0.05% 753.3626 Delayed Quote.13.69%
S&P GSCI CRUDE OIL INDEX -0.65% 475.8302 Delayed Quote.15.16%
STOXX EUROPE 600 -1.02% 465.55 Delayed Quote.-4.56%
STOXX EUROPE 600 NR -1.02% 1049.12 Delayed Quote.-4.51%
THE HONEST COMPANY, INC. 1.89% 5.94 Delayed Quote.-26.58%
UBS GROUP AG -1.63% 16.935 Delayed Quote.3.14%
US DOLLAR / AUSTRALIAN DOLLAR (USD/AUD) 0.60% 1.430001 Delayed Quote.3.20%
US DOLLAR / BRITISH POUND (USD/GBP) -0.09% 0.74638 Delayed Quote.1.06%
US DOLLAR / EURO (USD/EUR) -0.03% 0.897102 Delayed Quote.2.03%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.00% 115.19 Delayed Quote.0.24%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.14% 78.1253 Delayed Quote.4.11%
VIR BIOTECHNOLOGY, INC. 8.67% 33.97 Delayed Quote.-18.87%
WTI -0.11% 87.244 Delayed Quote.15.94%
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