Global stock rally pauses on Saudi tensions, profit taking

Agence France-Presse

Posted at Nov 08 2017 07:58 AM

NEW YORK - Wall Street's vaunted Dow Jones Industrial Average was a lonely bright spot in the West on Tuesday as stocks were mainly down following an Asian rally.

European equities markets retreated on worries over simmering Middle East tensions, sparked by a Saudi Arabian political crackdown that sent oil prices soaring on Monday.

Wall Street opened higher and the Dow just barely scraped into positive territory at the close of trading, rising a hair's breadth above Monday's close for a fourth straight record finish. The broader S&P was flat and the tech-heavy Nasdaq fell 0.3 percent.

Peter Cardillo of First Standard Financial told AFP the declines in New York came because investors were pausing after successive advances.

"This is just some profit taking after a long run," he said.

With little market-moving economic data, investors were awaiting weekly figures on oil inventories as well as news about pending Republican efforts to adopt sweeping tax cuts, he added.

Financial stocks weighed on the Dow, as Goldman Sachs fell 1.5 percent and JP Morgan Chase & Co gave up a full 2 percent.

Rising oil prices tend to support the energy sector and in turn boost world stock markets. But oil prices retreated from Monday's two-year highs and oil stocks reflected this.

Royal Dutch Shell fell 1.5 percent while ConocoPhillips dropped 0.4 percent and Exxon Mobil gave up 0.2 percent.

"Crude oil is back in the news today, with discussions over a potential production freeze being set against increased tensions in the Middle East," said market analyst Joshua Mahony at online trading firm IG.

"A wide-ranging corruption crackdown in Saudi Arabia, coupled with increased conflict with Iran, has added to the instability in the world's biggest crude producer," he added.


And the lingering geopolitical uncertainty cast a pall over Europe's equity markets, dealers said.

On the upside, Asian markets climbed, with Tokyo and Sydney breaking through historic ceilings thanks to strong corporate earnings and a positive global growth outlook.

Japan's Nikkei closed at its highest level since January 1992, and Sydney's S&P/ASX 200 broke above the psychologically important 6,000 points barrier for the first time since the global financial crisis.

Asia investors appear to have shrugged off nervousness over tensions on the Korean peninsula, with US President Donald Trump visiting Seoul.

Trump arrived Tuesday for a 2-day visit to South Korea, which he previously accused of appeasing the North.

A more alarming development for traders in Seoul -- where shares slipped 0.2 percent -- was the possible renegotiation of the US-Korea Free Trade Agreement.

Japan's rally has been aided by a strong earnings season, with Toyota on Tuesday the latest major corporate to raise its profit forecast for the year. 

KEY FIGURES AROUND 2200 GMT (6 a.m. Wednesday in Manila)

New York - DOW: FLAT at 23,557.23 points (close)

New York - S&P 500: FLAT at 2,590.64 (close)

New York - Nasdaq: DOWN 0.3 percent at 6,767.78 (close)

London - FTSE 100: DOWN 0.7 percent at 7,513.11 (close)

Frankfurt - DAX 30: DOWN 0.7 percent at 13,379.27 (close)

Paris - CAC 40: DOWN 0.5 percent at 5,480.64 (close)

EURO STOXX 50: DOWN 0.6 percent at 3,658.77 (close)

Tokyo - Nikkei 225: UP 1.7 percent at 22,937.60 (close)

Hong Kong - Hang Seng: UP 1.4 percent at 28,994.34 (close) 

Shanghai - Composite: UP 0.8 percent at 3,413.57 (close)

Euro/dollar: DOWN at $1.1588 from $1.1610 

Pound/dollar: DOWN at $1.3164 from $1.3172 

Dollar/yen: UP at 114.00 from 113.72 yen

Oil - Brent North Sea: DOWN 58 cents at $63.69 per barrel

Oil - West Texas Intermediate: DOWN 15 cents at $57.20

© Agence France-Presse