Publications
Partners
New York - The Dow's streak of seven straight records ended on Thursday amid profit taking and anxiety over tightening Federal Reserve policy, as gains by banks lifted markets in Paris and Frankfurt.
Investors around the world continued to digest the Fed's decision on Wednesday to begin to unwind a massive stimulus package, while also keeping alive a possible December interest rate hike.
The Dow and S&P 500 ended at records on Wednesday, while the dollar rallied sharply. But those patterns reversed course on Thursday.
After weeks of nearly steady upward movement, the market is "taking profits until the next news cycle with third-quarter earnings," said Sam Stovall, chief investment strategist at CFRA Research.
Phil Davis of PSW Investments was more downbeat, predicting a "pretty big sell-off over the course of the next couple of months" due to the short-term economic hit from two hurricanes and the impact of Fed tightening.
The blue-chip Wall Street index dipped 0.2% to close at 22 359.23.
The dollar also shifted from its decisive push higher the day earlier, falling against the euro and the pound even as it gained on the yen.
The euro strength stems from "expectations that the ECB could soon announce plans of its own to taper back on stimulus," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Banks get a boost
But higher interest rates translate into higher bank profits and shares of US banks such as Citigroup and JPMorgan Chase continued to rise.
European banks also were strong, with gains of more than two percent by BNP Paribas, Deutsche Bank and others leading to advances in stock markets in Paris and Frankfurt. London inched lower.
Shares in Germany's second-largest lender Commerzbank leapt as rumours that the government might soon sell off its stake set financial circles abuzz.
The bank's stock briefly added more than 5.0%, but was up just 1.5% at the close at €11.21.
In Japan, the yen continued to be pressured as the Bank of Japan kept in place its ultra-loose monetary policy and offered no clues on when it may pull back on the program.
"Inflation remains a long way below its projections, so further reductions in the (BoJ's) forecasts next month are all but guaranteed," Marcel Thieliant at research house Capital Economics said in a commentary.
"Policy tightening remains a long way off," he added.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
