World shares were mostly lower on Thursday after a mixed session on Wall Street, where losses by technology and industrial companies offset other gains.
Benchmarks fell in Tokyo and Hong Kong but were flat in Paris and London. Shanghai advanced after reopening following the Lunar New Year holiday.
Optimism that rollouts of coronavirus vaccines will set the stage for stronger economic growth in the second half of this year has been pushing shares higher. But expectations of a post-pandemic recovery also have resurrected concerns over inflation that could prompt governments and central banks to pull back on stimulus.
Germany's DAX rose 0.2% to 13,934.02 and the CAC40 in Paris was virtually unchanged at 5,765.36. Britain's FTSE was also almost unchanged, at 6,712.47. U.S. futures fell, with the contract for the S&P 500 down 0.3% and that for the Dow industrials 0.1% lower.
In Asian trading, the Shanghai Composite index gained 0.6% to 3,675.36 and the S&P/ASX 200 was flat, at 6,885.90. Japan's Nikkei 225 lost 0.2% to 30,236.09, while the Hang Seng in Hong Kong shed 1.6% to 30,595.27. In South Korea, the Kospi gave up 1.5% to 3,086.66.
On Wednesday, the S&P 500 slipped less than 0.1%, to 3,931.33 after handing back an early gain. The tech-heavy Nasdaq composite dropped 0.6% to 13,965.49.
The Dow Jones Industrial Average rose 0.3% to 31,613.02, a second straight record high, thanks partly to gains in Verizon Communications and Chevron. They rallied after Warren Buffett’s Berkshire Hathaway said it made major new investments in them in the second half of last year.
Small-company stocks took a bigger hit, with the Russell 2000 index of smaller companies slipping 0.7% to 2,256.11.
Energy prices rose again, adding to a sharp increase the day before due to the frigid weather that’s impacted much of the US.
US benchmark crude oil gained 38 cents on Thursday to $61.52 per barrel in electronic trading on the New York Mercantile Exchange. It surged $1.09 to $61.14 per barrel on Wednesday. Brent crude, the international standard, climbed 49 cents to $64.83 per barrel.
Underscoring signs of recovery, the Commerce Department said US retail sales soared a seasonally adjusted 5.3% in January from the month before, the biggest increase since June and much larger than forecast. That appeared to reinforce the perception that inflation is picking up even before President Joe Biden has delivered on his proposed $1.9 trillion stimulus package and other spending to get the economy back on solid footing.
The US Labour Department reported Wednesday that US wholesale prices surged by a record 1.3% in January, led by big gains in health care and energy prices. The bigger-than-expected increase was the largest one-month gain on records that go back to 2009.
Minutes from the Federal Reserve's January policy meeting showed central bank officials believed the pandemic still poses considerable risks to the economy and still support keeping interest rates low in order to boost the economy and help millions of Americans regain lost jobs.
Fed Chairman Jerome Powell has cautioned that inflation could accelerate for a time in coming months as the country opens up. But he and many private economists believe this will be only a temporary rise and not a sign that inflation is getting out of control.
Last month’s jump in retail sales was largely driven by the $600 stimulus checks that went out to most Americans in late December and early January. The data shows that recession-hit Americans are eager to spend cash on necessities, and aren’t saving the funds — which is the goal of stimulus checks.
It potentially means that additional stimulus, likely in the form of $1,400 checks in the $1.9 trillion stimulus plan, will likely provide a necessary boost to the economy.
The yield on the 10-year Treasury note held near its highest level in a year, at 1.28%. Bond rates have risen on expectations that pandemic recoveries will push inflation higher, and that has capped buying enthusiasm, as investors have sold to lock in recent gains.
The US dollar fell to 105.74 Japanese yen from 105.89 yen. The euro strengthened to $1.2066 from $1.2042.
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