• By The Financial District


US stocks dropped more than 1% on Monday (Tuesday, January 5, 2021, in Manila), pulling back from record highs in the first trading day of the new year as coronavirus cases surged, while the US dollar edged up and gold rallied, Caroline Valetkevich reported for Reuters.

Stocks hit record highs early in the New York session as investors focused on the rollout of COVID-19 vaccines. But sentiment quickly turned cautious over the path of the virus, which continues to spread amid the discovery of a new variant.

The outcome of runoff elections on Tuesday in Georgia for two US Senate seats added to the nervousness. “Investors are feeling a bit nervous on the first trading day of the new year, and I think this is a confluence of factors,” said Lindsey Bell, chief investment strategist at Ally Invest, in Charlotte, North Carolina. MSCI’s All-Country World Index, which tracks stocks across 49 countries, was down 0.5% after earlier hitting a record.

The Dow Jones Industrial Average fell 382.59 points, or 1.25%, to 30,223.89, the S&P 500 lost 55.42 points, or 1.48%, to 3,700.65 and the Nasdaq Composite dropped 189.84 points, or 1.47%, to 12,698.45.

The pan-European STOXX 600 index rose 0.67%, while Britain’s FTSE 100 index closed up 1.7% on its first post-Brexit trading day. In currency trading, the U.S. dollar recovered after falling to its lowest level since April 2018.

The dollar index rose 0.149%, with the euro up 0.92% to $1.2249.

The Japanese yen strengthened 0.06% versus the greenback to 103.14 per dollar, while Sterling was last trading at $1.3564, down 0.78% on the day.

Spot gold prices gained 2.3%, while U.S. crude oil futures fell 1.9% to settle at $47.62 a barrel and Brent futures dropped 1.4% to $51.09. Oil prices slipped after OPEC+ failed to decide whether to increase output in February and agreed to meet again on Tuesday.

US Treasury yields retreated from early gains as stock indexes tumbled. US Treasury yields edged higher as traders repositioned at the start of trading in the new year. The benchmark 10-year yield was last up less than a basis point at 0.9165%.