Stock Market News For Jan 11, 2018
Zacks Investment Research | Jan 10, 2018 10:08PM ET
Broader markets declined on Wednesday following a surge in yield of the 10-year benchmark note after China considered halting purchase of U.S. Treasuries. Markets also suffered losses after reports from Canada surfaced that its government expects Trump to pull out of NAFTA soon. Meanwhile, cost of imported goods in the United States surged to a six year high.
The Dow Jones Industrial Average (DJI) decreased 0.06% to close at 25,369.13. The S&P 500 fell 0.1% to close at 2,748.23. The tech-laden Nasdaq Composite Index closed at 7,136.56, losing 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.9% to close at 9.69. A total of around 6.93 billion shares were traded on Wednesday, above the last 20-session average of 6.38 billion shares. Decliners outnumbered decliners on the NYSE by a 1.59 -to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored declining issues.
China Considers Halting Purchase of U.S. Treasuries
A Bloomberg report stated that top government officials in Beijing have advocated reducing or ceasing the purchase of U.S. Treasuries after reviewing China’s foreign-exchange holdings. Such a turn of events comes at a time when central banks globally have hinted at stepping back from buying bonds.
Such reports led the yield on the 10-year benchmark note higher by as much as four basis points to hit an intraday high of almost 2.6% which is also a 9-month high. This had negative ramifications for the U.S. stock market and such an event piqued an average investor’s appetite for risk and market watchers considered rotating out of safer havens to bonds.
Canada SaysTrump Might End NAFTA
Canadian media reported that their government was expecting President Trump to soon announce that the United States was exiting the North American Free Trade Agreement (NAFTA). The report also cited names of two top government officials from Canada who expected this to happen. Such reports weighed on investor sentiment and pulled the broader markets lower in the U.S., Canada as well as Mexico.
On several occasions in the past, Trump had threatened to pull out of the trilateral pact if major changes are not made to NAFTA. Government officials are due to meet for the sixth time from Jan 23 through Jan 28 in Montreal to discuss and negotiate on this issue.
However, such comments just before the meeting have made it increasingly doubtful that any negotiations would take place in the meeting. Shares of General Motors (NYSE:GM) fell as much as 2.4% following such reports. You can see Zacks Investment Research
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