By Caroline Valetkevitch
NEW YORK (Reuters) – Stocks on Wall Street mostly declined Tuesday following disappointing quarterly results from Goldman Sachs and other companies, while the dollar weakened against the Japanese yen amid expectations of a possible policy shift at the Bank of Japan.
A global stock index was little changed.
The BOJ is expected to make a key policy decision on Wednesday after a two-day meeting.
The dollar was last down 0.2% against the Japanese yen at 128.25, with investors braced for sharp moves when the BOJ concludes its meeting.
“If the BOJ decides to just tweak their operations, we could see a rebound in dollar/yen,” said Joe Perry, senior market analyst at FOREX.com and City Index in New York.
In Treasuries, longer-dated U.S. yields rose as investors awaited the outcome of the BOJ meeting and prepared for the likelihood of an increase in corporate debt supply.
On Wall Street, where investor focus has shifted to quarterly earnings reports, the Dow and the S&P 500 were lower, with shares of Goldman Sachs Group down more than 6%.
Goldman reported a bigger-than-expected 69% drop in fourth-quarter profit. Results from JPMorgan & Chase and others on Friday kicked off the U.S. fourth-quarter reporting period.
The Dow Jones Industrial Average fell 341.18 points, or 0.99%, to 33,961.43, the S&P 500 lost 3.51 points, or 0.09%, to 3,995.58 and the Nasdaq Composite added 6.06 points, or 0.05%, to 11,085.22.
The pan-European STOXX 600 index rose 0.40% and MSCI’s gauge of stocks across the globe gained 0.02%.
Also weighing on sentiment, Chinese data showed that the world’s second-biggest economy grew 2.9% in the fourth quarter of last year, beating expectations but underscoring the toll exacted by Beijing’s stringent “zero-COVID” policy.
China’s growth for 2022 of 3% was far below the official target of about 5.5%. Excluding a 2.2% expansion after COVID-19 first hit in 2020, it was the worst showing in nearly half a century.
The BOJ is under pressure to change its interest rate policy, after its attempt to buy itself breathing room backfired.
Japanese 10-year government bond yields topped the BOJ’s policy ceiling for a third straight session on Tuesday amid swirling speculation that policymakers could tweak stimulus settings.
U.S. benchmark 10-year note yields rose two basis points to 3.54% and two-year Treasury yields dipped three basis points to 4.21%.
In the energy market, U.S. crude recently rose 0.54% to $80.29 per barrel and Brent was at $85.85, up 1.65% on the day.
The No.1 cryptocurrency bitcoin has clocked a gain of about a quarter in January, leaping over 20% in the past week alone, putting in on course for its best month since October 2021. It was last nearly flat on the day.
(Additional reporting by Gertrude Chavez-Dreyfuss in New York, Tom Wilson in London and Kane Wu in Hong Kong; Editing by Gerry Doyle, Neil Fullick, Alex Richardson, Chizu Nomiyama and Andrea Ricci)
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