•U.S. stocks open lower, paring recent gains
•Shares in Europe edge down
•Stocks in Hong Kong and Shanghai rise
U.S. stocks opened lower Tuesday as investors remained on edge following last week’s sharp selloff.
The Dow Jones Industrial Average shed 155 points, or 0.6%, to 24463 shortly after the opening bell, while the S&P 500 declined 0.6%. The Nasdaq Composite dropped 0.5%.
All 11 major sectors of the S&P 500 were trading lower, sending the broad index down after it rose for a second consecutive session Monday. Shares of energy firms and health-care companies were among the biggest decliners.
In Europe, the Stoxx Europe 600 fell 0.3% in choppy trading. Most Asian markets gained, though Japanese stocks fell.
The moves followed last week’s vertiginous plunge, when the S&P 500 fell more than 5% in a broad selloff sparked by signs of increasing inflation and rising bond yields. Bets on continuing low market volatility were upended, with the Cboe Volatility Index, or VIX, a measure of expected swings in the S&P 500, ending the week up nearly 70%.
Investors say a strong global economy and solid earnings will continue to offer support, but the market recovery will be uneven.
“There is enough robust economic momentum and we still see the glass as half full,” said
chief investment officer at U.S. Bank Wealth Management. “But volatility will persist and we can see some more choppiness in the next few weeks.”
In a sign of skittishness, investors say they are reducing risk by rotating into cash and out of equities, according to the February survey of global fund managers by Bank of America Merrill Lynch released Tuesday. The survey also noted a record one-month jump in the proportion of investors indicating they have taken out protection against a sharp fall in equity markets in the next three months.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, fell 0.4%. The greenback had gained last week as investors were seeking havens from the turmoil but lost traction this week as markets stabilized.
Traders are watching for Wednesday’s U.S. inflation data as a key bellwether of what’s next for markets. Strong wage growth in January pressured U.S. bonds and was a precursor for last week’s correction, so analysts say a higher-than-expected reading could rattle markets.
Upside inflation surprise may further renew the upward pressure on yields and potentially trigger another correction in risk assets, analysts at Citigroup said in a note to clients.
The 10-year Treasury yield fell to 2.837%, according to Tradeweb, from 2.857% on Monday. It hit a four-year high of 2.902% intraday Monday.
In Asia, Japan’s Nikkei Stock Average fell 0.6%, while Hong Kong’s Hang Seng Index rose to 1.3%. The Shanghai Composite Index rose 1% ahead of the Lunar New Year holiday.
—Michael Wursthorn contributed to this article.
Write to Georgi Kantchev at email@example.com