World stock markets gave up early gains as a continued flight from healthcare shares dragged on Wall Street, overshadowing upbeat economic data from China.
The S&P 500 dipped as the healthcare index dived 3.4 per cent to erase its year-to-date gains on continued fallout from concerns about potential changes to U.S. policy, including a “Medicare for All” proposal by Senator Bernie Sanders.
“With a Democrat-controlled Congress, there is definitely more talk on regulating the sector and drug prices, which has negative headline risks,” said Matthew Granfki, director of strategy at Los Angeles-based Miracle Mile Advisors.
Mixed corporate results, including a revenue miss from International Business Machines Corp, also contributed to Wall Street’s stall, said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
“Investors are nervous about the earnings season,” he said. “A lot of stocks are heavy right now, even though (the companies) haven’t reported yet.”
The decline in U.S. stocks weighed on MSCI’s 47-country world index, which was buoyed earlier by better-than-expected Chinese data showing the country’s economy grew 6.4 per cent in the first quarter.
China’s industrial output surged 8.5 per cent in March from a year earlier, the fastest pace since July 2014 and well above forecasts of a 5.9 per cent increase. Retail sales also pleased, with a rise of 8.7 per cent.
Allianz Global Investors strategist and portfolio manager Neil Dwane said the data had been good enough to allay fears that China’s economy was collapsing, although the rest of the year remained in question.
“Beijing will now be in a wait-and-see mode to gauge whether it has done enough,” Dwane said, referring to stimulus efforts. “To be bullish (on stocks) from here you would have to believe in a pretty strong global recovery in the second half... We are a bit more ho-hum.”
Canada’s main stock index rose on Wednesday as energy stocks rose.
The Toronto Stock Exchange’s S&P/TSX Composite index was up 42.04 points, or 0.25 per cent, at 16,544.24.
The energy sector jumped 1.4 per cent. Canadian Natural Resources Ltd. was up 3.2 per cent, while Crescent Point Energy Corp. and Cenovus Energy Inc. finished 3.1 per cent and 3.0 per cent higher, respectively.
The financial and industrial sectors gained 0.5 per cent and 0.6 per cent, respectively.
Leading the index were Hexo Corp., up 12.0 per cent, Lundin Mining Corp., up 6.2 per cent, and CannTrust Holdings Inc., higher by 6 per cent.
Lagging shares were Alaris Royalty Corp., down 10.1 per cent, Aphria Inc., down 9.6 per cent, and Bausch Health Companies Inc., lower by 4.5 per cent.
Canada’s annual inflation rate edged up to 1.9 per cent in March from 1.5 per cent in February as the downward pressure from gasoline prices lessened, easing market expectations that the Bank of Canada would cut interest rates by year end.
Based on the latest available data, the Dow Jones Industrial Average fell 2.51 points, or 0.01 per cent, to 26,450.15, the S&P 500 lost 6.6 points, or 0.23 per cent, to 2,900.46 and the Nasdaq Composite dropped 4.15 points, or 0.05 per cent, to 7,996.08.
The pan-European STOXX 600 index ended 0.1 per cent higher.
MSCI’s gauge of stocks across the globe shed 0.16 per cent.
Benchmark 10-year notes last rose 3/32 in price to yield 2.5849 per cent, from 2.594 per cent late on Tuesday.
The euro edged up 0.1 per cent to $1.1294, recovering from losses driven by a Reuters report that several European Central Bank policymakers think the bank’s economic projections are too optimistic.
Another currency on the move was the New Zealand dollar , which sank 0.7 per cent to $0.6716 after annual consumer price inflation came in well below expectations, at just 1.5 per cent for the first quarter.
Against a basket of major currencies, the dollar was little changed.
In commodity markets, copper touched a nine-month high on strong Chinese economic data and ended 0.9 per cent higher at $6,556 per tonne.
Spot gold, by contrast, slipped to its lowest for the year. It was last down 0.2 per cent at $1,274.15 per ounce.
Oil prices edged lower, reversing course from earlier gains as U.S. government data showed inventories were drawn down less than an industry report had suggested on Tuesday.
U.S. crude was down 8 cents, or 0.1 per cent, at $63.97 a barrel. Global benchmark Brent crude was 2 cents off its close on Tuesday at $71.70 a barrel.