NEW YORK – United States stocks moved mostly higher yesterday as President Joe Biden unveiled a US$2 trillion (RM8.3 trillion) infrastructure spending plan, while shares declined elsewhere and oil prices pulled back.
The blue-chip Dow ended lower, but both the S&P 500 and Nasdaq Composite advanced.
All three indexes finished the quarter with solid gains on the improving outlook for the US following passage of Biden’s earlier economic relief package and accelerating Covid-19 vaccination campaigns.
Investors greeted the Biden plan’s effort to boost investment in bridges, ports and other infrastructure, while shrugging off a proposed hike in corporate taxes.
But, some analysts warned that the tax proposal could upset the market as the details become clearer.
“The issue now is that the administration apparently wants to pay for more of the programme with higher taxes instead of just borrowing, and that has a chance to eventually take a bite out of earnings,” said market strategist J.J. Kinahan at TD Ameritrade.
“It’s way too soon to talk about the tax impact in too much detail, but analysts do say if corporate taxes rise, it’s something to potentially worry about in 2022, not 2021.”
Elsewhere, world oil prices ended a choppy session lower as traders fret about the outcome of today’s Organisation of the Petroleum Exporting Countries’ oil output meeting.
Markets also digested a US private sector employment report from payroll services firm ADP, which showed a boost in hiring last month, before tomorrow’s key non-farm payroll data that will provide a crucial health check on the US economy.
London stocks shed 0.9% as investors also tracked a badly received £7.6 billion (RM43.4 billion) flotation for United Kingdom app-driven food delivery service Deliveroo.
Deliveroo, which has boomed on strong demand from locked-down consumers, saw the run-up to its initial public offering plagued by criticism of its business model that relies on using freelance labour.
“This lack of confidence in the business model has quickly been reflected in a disastrous first day of trading for the newly listed company, that saw the shares slide over 30% in the first 15 minutes of trading, before trading was halted,” said market analyst Michael Hewson at CMC Markets UK.
“If today’s price action is any indication of investor enthusiasm on the likes of profitability, cash flow and growth prospects, as we head towards an economic reopening, then today’s weakness could well be a warning sign.”
Elsewhere in Europe, Paris stocks shed 0.3% and Frankfurt rallied at the end of the day to finish flat.
Key figures around 2140 GMT
New York – Dow: DOWN 0.3% at 32,981.55 (close)
New York – S&P 500: UP 0.4% at 3,972.89 (close)
New York – Nasdaq: UP 1.5% at 13,246.87 (close)
London – FTSE 100: DOWN 0.9% at 6,713.63 (close)
Paris – CAC 40: DOWN 0.3% at 6,067.23 (close)
Frankfurt – DAX 30: FLAT at 15,008.34 (close)
EURO STOXX 50: DOWN 0.2% at 3,919.21 (close)
Tokyo – Nikkei 225: DOWN 0.9% at 29,178.80 (close)
Hong Kong – Hang Seng: DOWN 0.7% at 28,378.35 (close)
Shanghai – Composite: DOWN 0.4% at 3,441.91 (close)
Dollar/yen: UP at ¥110.71 from ¥110.36 at 2100 GMT
Euro/dollar: DOWN at US$1.1730 from US$1.1717
Pound/dollar: UP at US$1.3785 from US$1.3740
Euro/pound: DOWN at 85.06 pence from 85.27 pence
West Texas Intermediate: DOWN 2.3% at US$59.16 per barrel
Brent North Sea crude: DOWN 0.9% at US$63.54 per barrel. – AFP, April 1, 2021
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