Weak Chinese and European economic data weighed on stocks around the world and boosted safe-haven Treasuries and the Japanese yen on Wednesday, though Wall Street shares edged higher as investors took advantage of cheaper shares to ring in the new year.
Chinese factory activity contracted for the first time in more than two years, according to a private survey.
The Purchasing Managers` Index (PMI) for the euro zone also reached its lowest level since February 2016, and France`s PMI fell in December for the first time in two years. Concerns about the flagging global economy contributed to U.S. stocks posting a loss in 2018 for the first time in a decade.
The U.S. benchmark S&P 500 stock index dropped as much as 1.6 percent on the data, but later moved higher in choppy trading and ended up 0.13 percent.
Bank and energy shares, which have been especially hard-hit in recent sell-offs, were among the biggest gainers. But while cyclical stocks rose, defensive shares fell.
Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta, said that divergence was likely driven by investors` seeking to rebalance their portfolios by looking for undervalued stocks
"It`s a normal shifting in position, regardless of the data today," Lerner said. "We`re seeing a `January effect` on areas of the market that have sold hard."
Energy shares also benefited from a jump in oil prices, which climbed as U.S. stocks recovered.(For a graphic on how global markets did in 2018, click https://tmsnrt.rs/2Ss8qjS)MSCI`s gauge of stocks around the globe <.miwd00000pus> ended 0.26 percent lower, as did Asian markets and the pan-European STOXX 600 <.stoxx>.
Reflecting lingering investor nervousness, yields on U.S. 10-year Treasury notes
"The yield curve is signalling that something is wrong," said Matt Miskin, market strategist at John Hancock Investments in Boston. "The underlying economic data continues to suggest a slowdown."
The safe-haven Japanese yen
Yet the dollar index <.dxy>, which measures the greenback against a basket of six other currencies, advanced 0.7 percent as the euro
Benchmark 10-year U.S. Treasury notes
Brent crude futures
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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