Stocks slip in Tokyo, but rise in Hong Kong and mainland China
Shares were mixed in Asia on Tuesday, after buying of technology stocks nudged the S&P 500 closer to the record high it set in February before the pandemic crunched the global economy.
Japan’s Nikkei 225 NIK, -0.19% slipped 0.3% while Hong Kong’s Hang Seng Index HSI, -0.07% advanced 0.2%. The Shanghai Composite SHCOMP, +0.35% rose 0.4% and the smaller-cap Shenzhen Composite 399106, +0.48% gained 0.6%. South Korea’s Kospi 180721, -2.46% declined 0.2% while benchmark indexes in Taiwan Y9999, -0.64% , Singapore STI, -0.29% and Indonesia JAKIDX, 0.75% were mixed. Australia’s S&P/ASX 200 XJO, +0.77% rose 0.7%.
Markets were buoyed by developments in Washington, as Speaker Nancy Pelosi called the House back into session, cutting short the lawmakers’ summer recess for a vote expected Saturday on legislation to prohibit changes in the U.S. Postal Service amid growing concerns that the Trump administration is trying to undermine the agency ahead of the November election.
The proposed package will also include $25 billion to shore up the Postal Service, which faces continued financial losses. But prospects for additional economic aid for American workers and businesses remain uncertain after talks on a fresh stimulus package stalled.
Investors say it’s crucial that the support comes, particularly after $600 in weekly unemployment benefits and other stimulus from the U.S. government expired.
“The markets are in ‘show me the money’ mode, perhaps erring on the side of caution, not holding their breath for an imminent deal in Congress,” Stephen Innes of AxiCorp said in a commentary. “Sadly, this leaves the U.S. real economy waddling and many businesses and millions of consumers getting the short shrift.”
Without more help for the U.S. economy, analysts say the recovery that investors have been assuming is on the way won’t materialize. And that assumption is a huge reason the stock market is as high as it is.
Still, on Monday the S&P 500 SPX, +0.27% picked up 9.14 points, or 0.3%, to 3,381.99. Earlier in the day, it briefly crossed above its record closing level of 3,386.15, which was set on Feb. 19 before the pandemic shut down businesses worldwide and created the worst recession in decades.
The Nasdaq composite COMP, +1.00% rose 1% to 11,129.73, and smaller stocks in the Russell 2000 index gained 0.5%, to 1,585.47. The Dow Jones Industrial Average DJIA, -0.30% was an outlier, slipping 0.3% to 27,844.91.
Treasury yields moderated a bit, following the big run for the 10-year yield last week. It dipped to 0.68% from 0.71% late Friday. It had zoomed upward from 0.56% through last week.
Higher yields can be an indication that investors are upgrading their expectations for inflation and the economy. But they can also pull some buyers away from stocks into bonds, hurting stock prices in the process.
Benchmark U.S. crude oil CLU20, -0.21% gave up 24 cents to $42.64 per barrel in electronic trading on the New York Mercantile Exchange. It added 88 cents to settle at $42.89 per barrel on Monday. Brent crude BRNV20, -0.04% , the international standard, lost 22 cents to $45.15.
In currency dealings, the U.S. dollar USDJPY, -0.46% weakened to 105.62 Japanese yen from 105.98 yen.