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US: Stocks retreat as Snap surges in debut

Friday, March 3, 2017 - 06:31

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[NEW YORK] US stocks retreated and European equities were little changed on Thursday as investors paused for breath following strong gains earlier this week.

Analysts said a pullback in the broader market was to be expected after US stocks gained more than one per cent in a heady session Wednesday that left all three indices at records.

The main focus of attention in the US was the initial public offering of Snap Inc, the parent company of instant messaging service Snapchat, which observers said could be the hottest new listing this year.

Snap surged 44 per cent in its trading debut.

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The broad-based S&P finished down 0.6 per cent.

"A lot of it has to do with that move yesterday," said Bill Lynch, director of investment from Hinsdale Associates. "I think it's just a simple case of profit taking today given the large move in major stock averages yesterday."

Markets in Paris, London and Frankfurt registered modest moves or were flat.

Tokyo's Nikkei gained 0.9 per cent, boosted in part by the dollar's advance on the yen.

The dollar also pushed higher against the euro and pound as Federal Reserve Governor Lael Brainard became the latest US central banker to signal an interest rate hike could be imminent.

"The main story is still the US dollar," said BK Asset Management managing director Kathy Lien. "The bulls remain in control and show no signs of letting up."

Oanda analyst Craig Erlam said, "The language from the Fed has become far more hawkish over the last couple of weeks and yesterday's comments from Lael Brainard - arguably the most dovish policy maker - was the icing on the cake." "Not only is March now on the table, in many people's eyes it's the base case scenario which is a massive change from even a week ago."

In Europe, dealers tracked data showing eurozone inflation had in February hit the European Central Bank's 2.0 per cent target for the first time since 2013 as its massive economic stimulus appeared to be finally paying off.

Unemployment in the 19-country single currency area in January meanwhile was 9.6 per cent, unchanged from December but holding at its lowest rate since May 2009, the Eurostat statistics service said.

AFP

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