Wall Street dips but European, Asian stocks rise

London: Wall Street stocks fell Tuesday, taking a breather from a recent market rally and digesting a US credit rating downgrade, while European and A...

London: Wall Street stocks fell Tuesday, taking a breather from a recent market rally and digesting a US credit rating downgrade, while European and Asian shares rose as China cut interest rates to historic lows. The dollar strengthened a little against major currencies, just ahead of a meeting of G7 finance ministers in Canada that will discuss global economic conditions, as well as seeking a common position on Ukraine. The Chinese central bank move, which had been expected, comes as officials battle to kickstart the economy amid trade tensions with the United States and a persistent domestic spending slump. In New York, the S&P 500, Dow Jones and Nasdaq indices all shed less than half a percentage point at the start of trading. Analysts said investors did not seem overly alarmed by Moody's downgrading the US credit rating last Friday, though it was weighing on the dollar and US bonds.

"The downgrade news could have easily triggered more of a serious downside correction," noted David Morrison, senior market analyst at Trade Nation. But "it looks as if sentiment is sufficiently resilient to take this punch on the nose in its stride," he said. He added, that more generally, "it appears that there's a general expectation that the US will sort out all its trade issues with its trading partners by early June, or by August in the case of China". The US market focus on Tuesday was more on the fate of US President Donald Trump's giant tax cut proposal, which he was discuss in a closed-door meeting with House Republicans. The legislation is expected to face a close vote later this week.

In Europe, major stock markets were in positive territory in mid-afternoon trading, with the FTSE 100 up nearly 0.9 percent up. The Frankfurt DAX index topped 24,000 points for the first time, while Paris was also in the green.

Asian markets closed higher, with Hong Kong rising more than one percent and Shanghai and Tokyo both up.

Elsewhere, the Australian central bank cut its key interest to its lowest level in two years, citing steady progress in bringing inflation under control.