NEW YORK (Reuters) – Global equity markets swooned on Friday, even as the Nasdaq and S&P 500 tried to recover and the bond rout eased a bit, but fears of rising inflation still weighed on sentiment as data showed a strong rebound in U.S. consumer spending.<\/p>\n
Shares of Amazon.com Inc, Microsoft Corp and Alphabet Inc edged up after bearing the brunt of this week\u2019s downdraft, while financial and energy shares fell.<\/p>\n
The S&P 500 gained 0.80% and the Nasdaq Composite added 1.87%. But the Dow Jones Industrial Average fell 0.3%.<\/p>\n
U.S. consumer spending rose by the most in seven months in January as low-income households got more pandemic relief money and new COVID-19 infections dropped, setting the U.S. economy up for faster growth ahead.<\/p>\n
The benchmark 10-year Treasury note on Thursday touched 1.614%, the highest in a year, rocking world markets. The note\u2019s yield is up more than 50 basis points year to date and is now close to the dividend return of S&P 500 stocks.<\/p>\n
The 10-year note fell 1.7 basis points to 1.4977%.<\/p>\n
The amount of money swirling through markets and U.S. stocks at close to all-time highs has caused investor angst, said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.<\/p> \u201cMany people are taking some profits and not necessarily reinvesting that money quite yet,\u201d Kinahan said, but the tug of war isn\u2019t over year.<\/p>\n \u201cThe U.S. equity market is still the best game in terms of safety versus opportunity. But there is a shift going on.\u201d<\/p>\n The scale of the recent Treasury sell-off prompted Australia\u2019s central bank to launch a surprise bond buying operation to try to staunch the bleeding.<\/p>\n MSCI\u2019s benchmark for global equity markets slid 0.83% to 661.49.<\/p>\n In Europe, the broad FTSEurofirst 300 index closed down 1.64% at 1,559.48. Technology stocks lost the most as they continued to retreat from 20-year highs.<\/p>\n The dollar rose against most major currencies as U.S. government bond yields held near one-year highs and riskier currencies such as the Aussie dollar weakened.<\/p> The dollar index rose 0.578%, with the euro down 0.78% to $1.2081. The Japanese yen weakened 0.42% versus the greenback at 106.66 per dollar.<\/p>\n Gold fell more than 2% to an eight-month low, the stronger dollar and rising Treasury yields hammered bullion and put it on track for its worst month since November 2016.<\/p>\n Benchmark German government bond yields fell for the first time in three sessions but were still headed for their biggest monthly jump in three years after rising inflation expectations triggered a sell-off.<\/p>\n The 10-year German bund note fell less than 1 basis points to -0.263%.<\/p>\n European Central Bank executive board member Isabel Schnabel reiterated on Friday that changes in nominal interest rates had to be monitored closely.<\/p>\n Copper recoiled after touching successive multi-year peaks in six consecutive sessions, falling more than 3% as risk-off sentiment hit wider financial markets after a spike in bond yields.<\/p>\n Three-month copper on the London Metal Exchange (LME) slumped to $9,112 a tonne.<\/p>\n MSCI\u2019s Emerging Markets equity index suffered its biggest daily drop since the markets swooned in March. MSCI\u2019s emerging markets index fell 3.06%.<\/p>\n The surge in Treasury yields caused ructions in emerging markets, which feared the better returns on offer in the United States might attract funds away.<\/p>\n Currencies favoured for leveraged carry trades all suffered, including the Brazil real and Turkish lira, which slid for a fifth straight day, erasing all the year\u2019s gains.<\/p>\n Asia earlier saw the heaviest selling, with MSCI\u2019s broadest index of Asia-Pacific shares outside Japan sliding more than 3% to a one-month low, its steepest one-day percentage loss since the market rout in late March.<\/p>\n Oil fell. Brent crude futures fell $0.78 to $66.1 a barrel. U.S. crude futures slid $1.24 to $62.29 a barrel.<\/p>\n