© Reuters. FILE PHOTO: Passersby are silhouetted as they walk past in front of an electric stock quotation board outside a brokerage in Tokyo, Japan October 18, 2022 REUTERS/Issei Kato
By Stephen Culp
NEW YORK (Reuters) -U.S. stocks were mixed and benchmark Treasury yields gained on Monday as a lack of market catalysts kept investors largely on the sidelines at the beginning of a likely low-volume, pre-holiday week.
The S&P 500 and the tech-laded Nasdaq were red, while the blue-chip Dow held onto a modest gain as investors favored defensive stocks in the wake of last week's flight to safety, which was driven by recession worries and the Federal Reserve's hawkish rhetoric as it wages war against inflation.
With just two weeks remaining in 2022, the S&P 500, the Dow and the Nasdaq are on track to notch their largest annual percentage losses since 2008, the nadir of the global financial crisis.
"To take a step back, the overwhelming theme of 2022 has been all about inflation and the Fed’s policy response," said Huw Roberts, head of analytics at Quant Insight in London. "We’ve seen a financial shock on par with 2008, but for different reasons."
Market participants have been caught in a tug-of-war between signs of economic softness which could translate to a dovish pivot from the Federal Reserve, hopes that were dashed when the central bank downgraded its economic outlook and warned that restrictive interest rates will rise higher and last longer than many might have hoped.
"Just as markets get excited by a dovish pivot, (they) are undone by policy tightening," Roberts added.
The Dow Jones Industrial Average rose 21.35 points, or 0.06%, to 32,941.81, the S&P 500 lost 11.14 points, or 0.29%, to 3,841.22 and the Nasdaq Composite dropped 89.22 points, or 0.83%, to 10,616.20.
European shares gained ground amid the rubble of last week's brutal sell-off, which was driven in large part by central banks ratcheting up interest rates and looming recession fears.
The pan-European STOXX 600 index rose 0.43% and MSCI's gauge of stocks across the globe shed 0.23%.
Emerging market stocks lost 0.05%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.23% lower, while Japan's Nikkei lost 1.05%.
U.S. Treasury yields rose as investors considered how high the Federal Reserve will hike interest rates and how long they will remain at restrictive levels in its battle against inflation.
Benchmark 10-year notes last fell 26/32 in price to yield 3.5754%, from 3.482% late on Friday. Prices move inversely to yields.
The 30-year bond last fell 65/32 in price to yield 3.638%, from 3.533% late on Friday.
The dollar inched nominally lower against a basket of world currencies, which were boosted by a modest improvement in investor risk appetite.
The dollar index fell 0.02%, with the euro up 0.01% to $1.0583.
The Japanese yen weakened 0.08% versus the greenback at 136.84 per dollar, while sterling was last trading at $1.213, down 0.08% on the day.
Crude prices rebounded on hopes of strengthening demand in the wake of China's relaxation of its zero-COVID policy.
U.S. crude rose 0.48% to $74.65 per barrel and Brent was last at $79.57, up 0.67% on the day.
Gold was little changed, holding steady amid dollar weakness and a lack of catalysts.
Spot gold slipped 0.2% to $1,788.39 an ounce.
We read at: Investing.com