NEW YORK :Investors sought to stanch the bleeding on Wednesday after world stock markets suffered their worst rout since January and U.S. and European borrowing costs raced to their highest in months.
Stock indices in the United States and Europe staged a partial recovery after a heavy sell-off on Tuesday consigned Wall Street to its steepest drop since mid-July.
The Dow Jones Industrial Average rose 90.93 points, or 0.27per cent, to 34,390.92, the S&P 500 gained 6.86 points, or 0.16per cent, to 4,359.49 and the Nasdaq Composite dropped 34.24 points, or 0.24per cent, to 14,512.44.
The pan-European STOXX 600 index rose 0.6per cent, with investors looking past a 2.2per cent fall in the previous session.
MSCI’s gauge of stocks across the globe shed 0.27per cent.
Declines in tech stocks earlier in the week created opportunities for investors looking for value, analysts said.
“Bargain hunters have stepped into the fold today as they have swooped in to snap up relatively cheap stocks,” said David Madden, market analyst at Equiti Capital.
Traders slowed their selling of U.S. Treasuries, leaving yields little changed, as they kept an eye on government spending talks in Washington.
After four consecutive sessions in which the 10-year yield rose, the yield fell as low as 1.494per cent on Wednesday morning before finding support.
Benchmark 10-year notes last rose 2/32 in price to yield 1.5288per cent, from 1.536per cent late on Tuesday.
“The question that will come in the next 10 days is will the U.S. Treasury yield keep pushing above 1.5per cent,” said Societe Generale strategist Kenneth Broux.
The dollar rallied to a one-year high against rival currencies. The greenback is on course for its best year since 2015 just as doubts re-emerge about the global recovery from the COVID-19 pandemic and Washington is bogged down in debt ceiling talks that could lead to a government shutdown.
The dollar index rose 0.753per cent, with the euro down 0.78per cent to US$1.159.
Gold fell to its lowest in seven weeks on Wednesday as the dollar advanced.
Spot gold dropped 0.5per cent to US$1,725.10 an ounce. U.S. gold futures settled 0.8per cent lower at US$1,722.9.
In commodity markets, oil prices dropped, having broken through US$80 a barrel for the first time in nearly three years the day before.
U.S. crude oil futures settled at US$74.83 per barrel, down 0.6per cent. Brent crude futures settled at US$78.64 per barrel, also down 0.6per cent.
Overnight Asia-Pacific shares had managed to restrict falls to 1.2per cent. Not including Japan, the region was heading for a 9.4per cent decline for the third quarter, its worst quarterly performance since the first three months of 2020, when global markets were roiled by the initial spread of COVID-19.
China’s worsening power crunch pushed investors out of Chinese stocks vulnerable to factory shutdowns, including chemicals and steelmaking, even as the country’s economic planning agency sought to reassure residents and businesses.
Debt-saddled property giant China Evergrande’s shares did leap 15per cent after it said it planned to sell a 9.99 billion yuan (US$1.5 billion) stake in Shengjing Bank.
Investors are still waiting to see whether the developer makes some now-overdue bond payments and rating firm S&P Global said another major property firm, Fantasia, was also at growing risk of default.
Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
Graphic: World FX rates http://tmsnrt.rs/2egbfVh
(Additional reporting by Alun John in Hong Kong and, Marc Jones, Dhara Ranasinghe and Sujata Rao in London; Editing by Edmund Blair, Kirsten Donovan, William Maclean, Will Dunham and Jonathan Oatis)