Stocks are mixed in Asia as investors focus on the Federal Reserve policy meeting that ends Wednesday.
Shares rose in Hong Kong and Tokyo but fell in Seoul and Sydney. Shanghai was little changed.
The Fed is expected to keep its extremely supportive policy stance unchanged given the slow progress in vanquishing the pandemic, analysts said.
Markets have meandered since last week as investors weighed solid corporate earnings results against renewed worries that troubles with COVID-19 vaccine rollouts and the spread of new variants of coronavirus might delay a recovery from the pandemic.
With the virus spreading like “wildfire” in parts of the world, the first half of the year might be “lost,” Stephen Innes of Axi said in a commentary. “ Some are even concerned that vaccines may not prove useful enough to eradicate the virus. And these concerns will continue to linger over markets like a dark cloud until vaccine distributions get ironed out, and a definitive drop in contagion levels can thoroughly support the vaccine efficacy results.”
The reality that President Joe Biden’s $1.9 billion stimulus package won’t be “rubber stamped” by the U.S. Senate is also weighing on sentiment.
For now, “ranging is a summation of the state of play in the financial markets at the moment,” Jeffrey Halley of Oanda said in a commentary.
Tokyo’s Nikkei 225 index added 0.3% to 28,635.21, while the Hang Seng in Hong Kong edged 0.1% higher to 29,429.26. The Kospi in South Korea sank 0.6% to 3,122.56, while the Shanghai Composite index was virtually unchanged, at 3,568.90. In Australia, the S&P/ASX 200 lost 0.6% to 6,780.60.
Overnight, the S&P 500 lost 0.1% to 3,849.62 but was within 0.2% of the record high it set Monday. The Dow Jones Industrial Average dropped 0.1%, to 30,937.04. The tech-heavy Nasdaq composite also slid 0.1%, to 13,626.06. The Russell 2000 index of smaller companies gave up 0.6%, to 2,149.86.
This is the busiest week so far of quarterly earnings reporting season for U.S. companies.
More than 100 companies in the S&P 500 are scheduled to tell investors this week how they fared during the last three months of 2020. As a whole, analysts expect S&P 500 companies to say their fourth-quarter profit fell 5% from a year earlier. That’s a milder drop than the 9.4% they were forecasting earlier this month, according to FactSet.
General Electric climbed 2.7% after the industrial conglomerate reported a surge in cash flow. GE is attempting a turnaround after shedding unprofitable divisions and focusing more on big industrial products like jet engines and power equipment. Typically, when a company is in turnaround, investors care more about cash flow than quarterly profits because it shows the company is able to pay down debts.
Johnson & Johnson rose 2.7% after the company reported fourth-quarter results that cruised past Wall Street’s expectations. A big jump in prescription drug sales boosted the company’s revenue, but profits dove 57% due to higher research spending and one-time charges totalling $2.4 billion. The company also said it expects to share results from the late-stage study of its experimental COVID-19 vaccine, which requires only one dose, by early next week.
The fate of Biden’s plan to send $1,400 to most Americans and deliver other support for the economy remains uncertain given the slim majority of the Democrats in the Senate. But on Tuesday, Senate Majority Leader Chuck Schumer said Democrats are prepared to push ahead with the relief package, even if it means using procedural tools to pass the legislation without Republicans.
The yield on the 10-year Treasury edged lower to 1.03% from 1.04% late Tuesday.
In other trading, benchmark U.S. crude oil rose 38 cents to $52.99 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 16 cents to $52.77 per barrel on Tuesday. Brent crude, the international standard, added 36 cents to $56.00 per barrel.
The U.S. dollar was trading at 103.67 Japanese yen, up from 103.62 yen late Tuesday. The euro was almost unchanged, at $1.2163.
AP Business Writers Alex Veiga, Damian J. Troise and Ken Sweet contributed.
Elaine Kurtenbach, The Associated Press