S&P 500 ends at record, while Evergrande plunges in market return
The S&P 500 finished at a record Thursday as more solid earnings lifted investor sentiment, while European and Asian bourses mostly fell on fresh concerns about fallout from China’s Evergrande saga.
Equities have been rallying over the last week following a run of good earnings reports that have offset worries about higher US inflation causing a shift to more restrictive monetary policy.
US indices were choppy Thursday, but finished the session at peaks.
The market firmed up into the close, despite “calls that the market was overextended on a short-term basis,” said a note from Briefing.com. “Presumably, there were fears of missing out on a break-out rally in the S&P 500.”
Earlier, shares of embattled Chinese real estate company Evergrande plunged more than 10 percent in its first session after more than a two-week suspension.
In a statement Wednesday, when it announced it would resume trading, Evergrande said a deal worth $2.58 billion to sell a 50.1 percent stake in its property services arm had fallen through.
The company also warned that it could not guarantee meeting its debt obligations, reigniting fears of contagion.
Justin Tang, of United First Partners, cautioned that “without the infusion of cash from the sale” of assets, the firm’s share price “is going to take the elevator down.”
The situation again raised worries about the impact on the wider economy, with the property sector accounting for a huge chunk of China’s gross domestic product and several other developers recently failing to meet debt payment deadlines.
“China’s Evergrande crisis reared its ugly head again,” noted AJ Bell financial analyst Danni Hewson.
“This hit stocks with Chinese exposure, most notably the mining sector.”
Data this week showed the country’s economic growth was slower than expected in the third quarter.
Still, top officials at the People’s Bank of China and regulators have insisted the fallout from the crisis could be contained.
Elsewhere, bitcoin pulled back after hitting an all-time high Wednesday when a financial instrument dedicated to the unit made a successful debut on the New York Stock Exchange.
“We may be seeing a little profit-taking in bitcoin,” said market analyst Craig Erlam at currency trading platform Oanda, who added that “in the longer term it seems there’s plenty of support for the rally.”
– Key figures around 2050 GMT –
New York – Dow: UNCHANGED at 35,603.08 (close)
New York – S&P 500: UP 0.3 percent at 4,549.78 (close)
New York – Nasdaq: UP 0.6 percent at 15,215.70 (close)
EURO STOXX 50: DOWN 0.4 percent at 4,155.73 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,017.53 (close)
Shanghai – Composite: UP 0.2 percent at 3,594.78 (close)
Euro/dollar: DOWN at $1.1628 from $1.1651 at 2100 GMT
Pound/dollar: DOWN at $1.3794 from $1.3824
Euro/pound: DOWN at 84.26 pence from 84.27 pence
Dollar/yen: DOWN at 114.02 from 114.38 yen
Brent North Sea crude: DOWN 1.4 percent at $84.61 per barrel
West Texas Intermediate: DOWN 1.1 percent at $82.50 per barrel