U.S. Stocks Keep Their Cool This Week as Global Markets Tumble

       

By Kristen Scholer
        It's been a wild week for global markets. But U.S. stocks have remained steady.
        China's move to devalue its currency two sessions in a row at the start of the week sent chills through many world indices. With the exception of China's stock market and that of the U.S., global markets are on track to end the week mostly lower.
        The major bourse in Europe, a region more levered to Chinese demand than the U.S., is down 2.6% on the week. Meanwhile, Hong Kong's market is off 2.2% and Japan's Nikkei 225 is lower by 0.6% in the past four trading days.
        Amid calls that any possible spillover effect from China's move should be limited in the U.S., the S&P 500 and Dow Jones Industrial Average are up 0.7% and 0.6%, respectively, on the week.
        "With China's move to devalue the RMB roiling global markets and the prospect that, even if the FOMC begins to raise rates as UBS expects on September 17th, the pace of tightening will continue to be subject to incoming data as the Fed has emphasized all along, flows could move back toward US equities," said UBS Group strategist Julian Emanuel.
        Fractionally positive weekly performance in U.S. markets mirrors much of what has been going on the past six months as investors await clarification from the Federal Reserve as to when it's going to raise rates. Mr. Emanuel highlights that since the start of the second quarter, the U.S. has been a source of stability on the global scale.
        As China injected uncertainty into markets this week, propping up U.S. stocks have been safe-haven plays. Utilities, telecoms and REITs are up 1.7%, 1.1% and 0.9%, respectively, this week. The PHLX Gold/Silver Index is higher by 9.2%.
        Strategists at Bank of America Merrill Lynch say the "ongoing uncertainty" could continue to push investors into defensive, less-risky sectors for the rest of the summer.
        While U.S. stock returns have been muted in 2015 after three straight years of double-digit percentage increases, U.S. markets are holding up compared to their global counterparts even as a rate rise looms.
        (END) Dow Jones Newswires

        August 13, 2015 14:54 ET (18:54 GMT)