Daily market review

United States

Equities ended flat to weaker Monday with technology and other growth sectors giving up some gains from last week, but major indexes closed well above the day's lows. The Dow Jones industrial average eased 0.2 percent while the S&P 500 was flat, and the NASDAQ eased 0.4 percent.

Apple, down 1.3 percent, hurt tech stocks. Communications services joined tech in giving up some recent gains, with Facebook down 0.3 percent, and Google down 1.4 percent. Energy stocks retreated, with Chevron leading, down 1.1 percent. Airlines held back industrials, with United Airlines down 3.9 percent after a gloomy business update.

Among outperformers, banks caught a bid before they open the first-quarter earnings season Wednesday. Consumer discretionary fared best, paced by apparel with Levi Strauss up 3.1 percent, and Lululemon, up 1.8 percent.

Among companies in the news, semiconductor maker Nvidia rose 5.6 percent on strong guidance and after announcing plans for new server chips that would compete with Intel, which fell 4.2 percent, and AMD, down 5.1 percent. Meanwhile, Microsoft was unchanged after saying it would buy Nuance Communications, up 16 percent, the voice recognition leader.

Uber rose 2.9 percent after better than expected revenues and guidance. Tesla gained 3.7 percent after an upgrade at Canaccord Genuity. Cadence Bancorp rose 4.2 percent after agreeing to be acquired by BancorpSouth Bank, which lost 5.6 percent.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 26 cents to US$63.30 while spot gold fell US$10.63 to US$1,732.36. The US dollar weakened vs. most major currencies. The US Treasury 30-year bond yield rose 1 basis point to 2.34 percent and the 10-year note yield rose 2 basis points to 1.67 percent.


Equities retreated Monday on profit-taking as the Europe-wide STOXX 600 retreated from record highs. The STOXX 600 eased 0.5 percent, the German DAX and the French CAC both eased 0.1 percent, and the FTSE-100 slipped 0.4 percent.

Markets were encouraged by news that the pace of vaccines appears to be accelerating in Italy, France, and Germany, and as the UK eased lockdown restrictions to allow many shops, outdoor pubs, and gyms to reopen. Investors are awaiting Europe's profits season.

Among sectors, best were autos & parts, utilities, insurance, banks, chemicals, personal & household. Lagging were technology, travel & leisure, basic resources, retail, industrials, health care, food & beverage, oil & gas, telecom construction, and real estate.

Among stocks in the news, French utilities Veolia, up 9.5 percent, and Suez, up 7.6 percent, rose after agreeing to a merger. MPC Container Ships rose 11 percent after raising guidance. Treatt, the UK chemicals maker, rose 10 percent after a positive trading report. On the downside, Piraeus Financial Holdings fell 14 percent as it suspended trading to implement a reverse split. EasyJet fell 3.4 percent on a downgrade at HSBC.

In economic data, Eurozone retail sales rebounded more strongly than expected in February but still failed to recover all the ground lost in a shallower revised slump in January. Volumes were up 3.0 percent on the month, more than double the market consensus but followed a revised 5.2 percent nosedive at the start of the year.

Asia Pacific

Rising Covid-19 case counts depressed major Asian equities markets Monday with Japanese cities resuming restrictions and Korea and India among locations reporting a resurgence. Investors also awaited a series of key Chinese economic data points this week and noted Fed Chair Jerome Powell's weekend comment that the US economy appeared at an inflection point, with growth set to surge but virus uncertainty remaining.

Chinese equities retreated nearly across the board with the Shanghai composite falling 1.1 percent and the CSI composite dropping 1.6 percent. Markets were on edge over more anti-China rhetoric from US Secretary of State Anthony Blinken, and as Chinese regulators continued their crackdown on domestic tech firms. Value stocks outperformed growth, but both were lower.

Alibaba, the online commerce leader, managed to rise 6.5 percent to buck the overall downtrend after agreeing to pay a record $2.8 billion fine, as the amount was less than feared. Other tech stocks faced continued selling pressure amid uncertainty over likely steps from Chinese regulators, with Tencent down 1.1 percent in Hong Kong trading. Hong Kong tracked mainland Chinese markets lower, with the Hang Seng down 0.9 percent; tech stocks and consumer stocks led the decline.

Japan's major cities increased their restrictions on movement after reporting a resurgence in cases. The Nikkei declined 0.8 percent and the Topix eased 0.3 percent, with growth stocks underperforming value. Best performing sectors were utilities, iron & steel, and warehouses, while lagging were miners, finance, and marine transportation.

Australia's All Ordinaries index declined 0.4 percent as the reopening trade took a hit on Covid worries. Weakness in miners, energy, and materials overcame a better showing in technology and financials. Risk appetite and economic expectations suffered after Prime Minister Scott Morrison said it was now unclear whether all Australians would be vaccinated for Covid-19 by year end, due to concerns over use of the AstraZeneca vaccine. Among sectors, travel stocks suffered from worries about vaccine delays. Real estate lagged on concerns over sales at shopping centers while iron ore and precious metals miners hurt materials. Health care fared better on an uptick in biotechs.

India's markets tanked on alarm over surging Covid cases: the BSE Sensex dropped 3.4 percent and the Nifty plunged 3.5 percent. Losses were across the board, with banks, real estate, metals, industrials, and autos hit the worst.

Looking ahead*

On Tuesday in Asia/Pacific, Chinese merchandise trade figures are due. In Europe, reports are scheduled on UK industrial production, UK merchandise trade, UK monthly GDP, Italian industrial production, and Germany's ZEW survey. In North America, US NFIB business sentiment and US CPI figures are due.

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