Daily market review

United States

Dip-buying in beaten-down technology and other growth stocks boosted equities Tuesday as the rotation into cyclicals/value consolidated. The Dow Jones industrial average firmed 0.1 percent, the S&P 500 gained 1.4 percent, and the NASDAQ rallied 3.7 percent.

The FAANGs and other heavily-weighted growth favorites were back in favor after a long bout of selling, with Facebook and Apple both up 4.1 percent, Netflix rising 2.7 percent, and Google up 1.4 percent. A falling back in US market rates provided support, while a supportive note from BankAmerica gave semiconductors a lift to help technology lead the broader market higher.

Gains in Amazon, up 3.8 percent, and Tesla, up 20 percent, helped consumer discretionary outperform. Communications services lagged with Disney off 3.7 percent, but internets advanced.

Materials retreated after Monday's rally. Health care lagged, with consumer staples hurt by weakness in grocers. Financials lagged as banks pulled back as the yield curve flattened. Energy stocks also lagged as oil prices retraced a bit.

Energy and financials lagged, while industrials held up relatively well. Boeing rose 3 percent after monthly orders in February beat cancellations for the first time since November 2019.

Among companies in focus, Chipotle Mexican Grill rose 6.9 percent after an upgrade at Goldman Sachs, while Intel gained 4.7 percent on the BankAmerica upgrade.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 69 cents to US$67.28 while spot gold rose US$36.12 to US$1,716.66. The US dollar fell vs. major currencies. The US Treasury 30-year bond yield fell 7 basis points at 2.25 percent while the 10-year note yield fell 6 basis points to 1.54 percent.


A mixed sector showing left major indexes moderately higher Tuesday as energy, utilities, and tech stocks bounced back while basic resources, autos, and financials lagged. The Europe-wide STOXX 600 gained 0.8 percent, the German DAX and French CAC both firmed 0.4 percent, and the FTSE-100 gained 0.2 percent.

Weakness in miners held back the FTSE 100, with Rio Tinto off 3.7 percent and BHP down 2.4 percent in London. Cyclicals/value generally retained their appeal vs. growth stocks, which have struggled as yields have risen and valuation worries continue. Investors are keying on Thursday's European Central Bank policy meeting amid hopes for an ECB response to rising bond yields.

Among companies in the news, TP ICAP, the broker, dropped 5.3 percent after cutting its dividend. Continental AG, the auto parts giant, lost 7.5 percent on weaker 2021 guidance. On the positive side, Pandora, the Danish jeweler, rose 7.2 percent after a big jump in same-store sales. ITV, the UK television network, rose 4.2 percent and Domino's Pizza rose 8.6 percent on positive quarterly results.

In economic data, Eurozone GDP contracted at a marginally steeper revised 0.7 percent quarterly rate in the fourth quarter following its 12.5 percent bounce in the July-September period. Annual growth was revised up a couple of ticks to minus 4.9 percent, although this was still down from the previous period's minus 4.2 percent.

Asia Pacific

Asian equities were mixed Tuesday as growth stocks remained on the defensive amid rising bond yields and after Monday's tech-stock selloff on Wall Street. A Bloomberg report that Chinese state-backed funds were buyers of Chinese stocks listed in Hong Kong helped tech stocks bounce back from early lows, but selling resumed later.

Despite the government support, China's Shanghai Composite index ended down 1.8 percent as investors focused on expectations for less supportive Chinese economic policy. Among sectors, value beat growth, but both sold off. Technology and health care lagged the most while energy and utilities held up best.

Hong Kong recovered initial losses to end higher, with the Hang Seng index up 0.8 percent and getting help from a strong showing for financials and an intra-day rebound in technology shares from early declines. Tech shares recovered briefly on a Bloomberg report that China state-backed funds, "the national team," were buying Hong Kong-listed Chinese stocks to steady the market during key Chinese economic policy meetings.

Recovery hopes gave Japanese equities a boost Tuesday, with cyclicals leading. The Nikkei gained 1.0 percent and the Topix was up 1.3 percent. Sectors outperforming included consumer discretionary and real estate, while tech shares bounced back to end higher. Among companies in focus, Mizuho Financial rose 1.5 percent on news it will fix a problem with its ATMs while Panasonic fell on news it will buy Blue Yonder, a US software company.

In Australia, financials, industrials, and consumer discretionary outperformed while growth and technology shares lagged as rotation into cyclicals continued. The All Ordinaries index firmed 0.4 percent. Energy and materials also underperformed.

Looking ahead*

On Wednesday in Asia/Pacific, Chinese CPI and PPI reports will be released. In Europe, French industrial production and Italian PPI data will be posted. In North America, the Bank of Canada policy announcement is due along with the US CPI and US Treasury budget reports.

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