US stocks try and fail to rally after Evergrande shock

Chinese property giant Evergrande is US$300 billion (S$400 billion) in debt and verging on collapse. PHOTO: AFP

NEW YORK (AFP) - Wall Street equities on Tuesday (Sept 21) tried to recoup some of their losses from the sharp slump seen in the previous session's trading but ultimately were unsuccessful.

Major United States indexes were hammered on Monday amid fears over Evergrande, a Chinese property giant that is US$300 billion (S$400 billion) in the hole and verging on collapse.

It seemed as if those worries were dialled back a notch on Tuesday as traders became confident Evergrande's troubles would not cause a larger shock.

But the modest rally seen in the day's trading petered out by the close, with investors staying cautious as the saga continued ahead of the conclusion of the Federal Reserve's two-day meeting set for Wednesday.

"The market is not very afraid of the Fed. It is looking to see how the Evergrande situation plays out and if there could be negative implications for the emerging markets and the global market," Spartan Capital Securities' Peter Cardillo said.

The benchmark Dow Jones Industrial Average dropped 0.2 per cent to close at 33,919.84. The broad-based S&P 500 lost 0.1 per cent to finish at 4,354.19.

The tech-rich Nasdaq Composite Index managed a 0.2 per cent gain to 14,746.39.

Traders are watching for signs from the Fed of when it will end its stimulus measures that helped the US economy weather the Covid-19 downturn last year, but which have been criticised for fuelling inflation in recent months.

Among individual companies, US Bank closed 2.6 per cent higher after announcing an US$8 billion deal to buy the American retail activities of Japan's Mitsubishi UFJ Financial Group.

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