Dow Jones Hits Record High Despite Financial Stocks Falling After Block Deal... Tesla Trades Above $500 Intraday (Comprehensive)

Nasdaq Closes Lower
US Treasury Yields Reenter 1.7% Range
Concerns Persist Over Institutional Investors' Portfolio Adjustments Ahead of Q1 Close

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed mixed amid continued aftershocks from the large-scale hedge fund liquidation sales. The Dow Jones Industrial Average hit an all-time high, but the Nasdaq index showed weakness. Concerns remain that the market could experience significant volatility if institutional investors adjust their holdings ahead of the first quarter close.

On the 29th (local time), the Dow Jones Industrial Average rose 98.49 points (0.30%) to close at 33,171.37, the S&P 500 index fell 3.45 points (0.09%) to 3,971.09, and the Nasdaq index dropped 79.08 points (0.60%) to 13,059.65.

The New York stock market opened lower due to the impact of a large-scale block deal worth $30 billion conducted last week.

Investor Bill Hwang, a Korean-American, operates Archegos Capital, and the large-scale block deal of its stock holdings caused damage that spread to Nomura, Credit Suisse, and others, worsening investor sentiment at the market open.

Accordingly, the American Depositary Receipts (ADRs) of Credit Suisse and Nomura fell 11.50% and 14.07%, respectively. Shares of Goldman Sachs and Morgan Stanley, which were involved in last week's block deal, also dropped 0.51% and 2.63%, respectively.

ViacomCBS and Discovery, which had fallen 27% due to the block deal, further declined by 6.68% and 1.6% on the day. Chinese Baidu also dropped an additional 1%. Tencent's stock fell 2% as well.

Despite the weakness in financial stocks heavily affected by the block deal, the Dow index rebounded, reflecting expectations for economic recovery.

Experts say the impact of this block deal is unlikely to seriously affect the market, but they are cautious about the possibility that large institutional investors such as pension funds may engage in portfolio rebalancing ahead of the first quarter close. There are concerns about significant volatility in the remaining two days of March trading.

In particular, the rise in U.S. Treasury yields is cited as a reason for portfolio adjustments. The yield on the 10-year U.S. Treasury rose to 1.71% on the day, climbing back above the 1.7% level. This is nearly double the level of 0.9% seen at the end of last year.

Amid rising interest rates, electric vehicle maker Tesla hit the $500 range intraday but closed down 1.2% at $611 after reducing its losses.

Although concerns about the spread of COVID-19 patients in the U.S. are growing, expectations that vaccine distribution will accelerate have helped restore investor sentiment.

On the day, President Biden announced that 90% of American adults will be eligible for COVID-19 vaccination by April 19, three weeks from now.

Aircraft manufacturer Boeing rose 2.3% on news that Southwest Airlines ordered 100 737 Max aircraft.

At the New York Mercantile Exchange, the May West Texas Intermediate (WTI) crude oil price closed at $61.56 per barrel, up $0.59 (1%) from the previous session.

This content was produced with the assistance of AI translation services.