United States
Equities ended flat to slightly better Wednesday as the market consolidated big gains from earlier in the week, with support from mostly positive earnings and a rise in energy stocks. The Dow Jones industrial average and the S&P 500 both firmed 0.1 percent and NASDAQ 100 was unchanged.
Blowout quarterly results lifted Google, up 7.3 percent, to help communications services outperform. Amazon was off 2.0 percent as the market digested news that founder Jeff Bezos would step down as CEO along with a huge earnings beat. Microsoft was another leader, up 1.5 percent after a technical breakout last week.
Energy stocks outperformed, powered by a third day of gains for crude oil prices, with Chevron up 2.2 percent. Tech stocks lagged amid weakness in chipmakers and in Apple, down 0.8 percent. Worst off were health care after disappointing results from selected biotechs, along with real estate and utilities.
Among stocks reporting, Abbvie, the biotech, rose 3.4 percent after an earnings beat and better guidance. Ebay rose 1.2 percent and Paypal gained 1.1 percent after topping earnings expectations.
On the downside, Biogen, another biotech, fell 5.2 percent after missing earnings expectations. PerkinElmer dropped 7.6 percent on disappointing guidance. Qualcomm, the memory chipmaker, fell 1.5 percent on disappointing results. Chipotle fell 1.5 percent after an earnings miss. CheckPoint Technologies fell 11 percent on a miss.
In US economic data, ADP estimated private payrolls will rise 174,000 in January's employment report, far above Econoday's current consensus for a rise of 35,000.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 90 cents to US$58.44 while spot gold fell US$2.29 to US$1,833.38. The US dollar was steady against major currencies. The US Treasury 30-year bond yield was up 4 basis points at 1.92 percent while the 10-year note yield rose 3 basis points to 1.13 percent.
Europe
Equities were mixed to mostly better Wednesday with support from positive earnings. The Europe-wide STOXX 600 rose 0.3 percent, the German DAX gained 0.7 percent, the French CAC was flat, and the UK FTSE-100 was down 0.1 percent. The Italian FTSE-MIB jumped 2.1 percent on news that former ECB President Mario Draghi was poised to form an emergency government in Rome.
Among sectors, outperformers were autos & parts, oil & gas, utilities, insurance, banks, retail, travel & leisure, industrials, and basic resources. Lagging were real estate, food & beverage, health care, financial services, media, technology, construction, personal & household goods, and chemicals.
Among stocks posting good news, Siemens rose 1.7 percent after an earnings beat and better guidance. Novo Nordisk gained 2.7 percent after a beat and a new share buyback. Publicis Groupe gained 2.3 percent after an earnings beat. Banco Santander firmed 0.7 percent after a beat and raised dividend. Vodaphone gained 6 percent after a beat.
On the downside, London markets were depressed by GlaxoSmithKline, down 6.3 percent after saying the pandemic was disrupting its business. AstraZeneca declined 1.1 percent after France announced it would not give the company's vaccine to people over 65
In economic data, UK PMI data for January confirmed dramatic deterioration. The 40.6 flash composite index was revised slightly higher but remained 9.2 points short of December's final 50.4 and below the 50-expansion threshold. Separately, for the Eurozone, the 47.5 flash composite output was revised up to 47.8 for all of January but it was still 1.3 points short of its 49.1 final year-end reading and below the 50-expansion threshold.
Asia Pacific
Risk-on sentiment lifted most major equity markets Wednesday though Chinese markets retreated on weak data and concern over tight financial conditions. Korean markets outperformed, along with Japan, as strong US corporate earnings bolstered expectations for robust results in Asian markets.
South Korea's Kospi rose 1.1 percent for a third consecutive day of strong gains, with Wednesday's advance paced by Kia Motors, up 9.7 percent on news it would team up with Apple to build electric vehicles.
Japan's Nikkei 225 rose 1.0 percent and the broader Topix gained 1.3 percent as investors reacted to upbeat results from Apple, Amazon, and other US mega-caps. Australia also outperformed paced by financials with the All Ordinaries up 0.9 percent after Reserve Bank of Australia Governor Philip Lowe renewed the RBA's pledge to keep policy accommodative.
Hong Kong's Hang Seng index recovered from initial declines to end up 0.2 percent, paced by technology and energy shares, with financial inflows from Mainland China strong again.
Chinese markets ended lower, with the Shanghai Composite down 0.5 percent after the PBOC drained liquidity despite the approach of the Lunar New Year holiday, a time of high demand for cash. Chinese PMI data came in soft, another negative. On the positive side, Covid-19 cases in China continued to decline.
Indian markets remained buoyant in the wake of the government's generous spending plans. The NSE Nifty 50 index rose 1.0 percent and the S&P BSE Sensex was up 0.9 percent, though well down from the day's highs.
Among companies reporting earnings beats, Lenovo gained 4.6 percent, Alibaba rose 0.3 percent, and Mitsubishi Motors gained 11 percent. Alibaba's strong results were dampened by its ongoing problems with US and Chinese regulators.
In economic data, the Markit China PMI for the services sector fell from 56.3 in December to 52.0 in January, indicating that activity in the sector expanded at a significantly slower pace. Separately, the Markit PMI Composite Index for Japan fell to 47.1 in January, above the flash estimate of 46.7 but down from 48.5 in December. The index for Japan's services sector fell to 46.1 in January, also above the flash estimate of 45.7, but down from 47.7 in December.
Looking ahead*
On Thursday in Asia/Pacific, the Australia goods and services trade report is scheduled. In Europe, the following are due: Swiss consumer climate index, UK PMI construction, Eurozone retail sales, the UK Bank of England monetary policy announcement and BOE monetary policy report. In North America, reports are scheduled on US jobless claims, US factory orders, and US productivity and costs.
