Daily market review

United States

Equities ended narrowly mixed Wednesday after megacaps retreated from early highs and the market eyed mostly positive earnings news. The Dow Jones industrial average firmed 0.3 percent, the S&P 500 rose 0.1 percent, and the NASDAQ declined 0.4 percent.

Megacaps saw dip-buying but Apple up 0.2 percent, Google up 0.1 percent, and Microsoft down 0.5 percent, retreated from early highs, while value/cyclicals saw better buying. Energy, materials, financials, and industrials held up best, while defensive sectors including real estate and utilities lagged. Energy stocks continued to lead outperformers despite softer oil prices, with Chevron up 2.7 percent and oil driller Haliburton up 5 percent after recent analyst upgrades.

Earnings remained in focus, with General Motors up 4 percent after an earnings beat. Tupperware, the stay-at-home play, rose 6.2 percent after beating revenue and earnings expectations. Caesars Entertainment rose 7.8 percent after it said its Las Vegas resort weekends were "sold out for the foreseeable future."

On the downside, Hilton fell 4.4 percent on revenues and earnings misses as the hotel chain remained hamstrung by travel restrictions. Pfizer, which ended unchanged, and Moderna, down 6.2 percent, fell after the Biden administration backed waivers on Covid vaccine patents to allow broader use. Zillow, the online real estate broker, fell 6.9 percent despite blowout results as the market disliked its guidance.

In economic data, the ISM services index came in at 62.7 in April after March's 64.0 to make for a rare back-to-back 60 showing that underscores just how much business surveys are jumping. Led by new orders at 63.2, many readings in April's ISM service report slowed several points from March but remain prodigious nevertheless. Meanwhile, at 742,000, ADP's April estimate was a little on the low side of expectations for what still promises to be a very strong employment report for April.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil eased 22 cents to US$68.66 while spot gold rose US$6.97 to US$1,786.05. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield was down 2 basis points at 2.25 percent and the 10-year note yield was down 2 basis points at 1.57 percent.


The reopening trade returned Wednesday to lift European equities on rising commodities prices, better economic data, and company news. The Europe-wide STOXX 600 rose 1.8 percent, the German DAX jumped by 2.1 percent, the French CAC gained 1.4 percent, and the UK FTSE 100 was up 1.7 percent.

In economic news, Eurozone business activity expanded for a second successive month in April. At 53.8, the final composite output index was marginally firmer than its 53.7 flash estimate and up 0.6 points versus March's final 53.2. Service sector output returned to positive growth following seven straight months of contraction.

Energy and commodities-linked stocks led the way higher, with Rio Tinto up 4.6 percent and BHP Billiton up 5 percent on surging copper prices, on recovery hopes.

Companies in the news included Maersk, up 6.9 percent, after the mega-shipper raised its guidance and launched a share buyback. Rational, the appliances company, rose 13 percent on an earnings beat. Merck rose 1.3 percent and Hugo Boss gained 6 percent after raising their guidance.

Asia Pacific

Asian equities markets were mixed Wednesday with activity thinned by holidays in mainland China, Korea, and Japan. India rebounded on news of an injection of liquidity from the Reserve Bank of India while Tuesday's US tech stock selloff spilled over into Hong Kong and Taiwan.

Tech and growth stocks continued to react poorly to comments from US Treasury Secretary Janet Yellen on the prospect of higher interest rates, despite her effort to walk back the comments later.

Australia firmed, with the All Ordinaries up 0.3 percent and with most sectors higher, paced by health care and financials. CSL, the biotech, rose 2.4 percent after an analyst upgrade, and Commonwealth Bank gained 2.5 percent on the reopening trade.

Weakness in tech shares and consumer discretionary hurt Hong Kong with the Hang Seng down 0.5 percent. Alibaba fell 2.3 percent and Tencent was down 1.9 percent on spillover from declines in tech and e-commerce shares in the US session.

India's markets rose after the Reserve Bank of India announced a series of measures to shore up the economy and financial markets, with the Sensex up 0.9 percent and the Nifty up 0.8 percent. Banks and pharma stocks outperformed.

Looking ahead*

On Thursday in Asia-Pacific, Bank of Japan minutes and Chinese merchandise trade data. In Europe, the following releases are due: German manufacturers' orders, UK PMI composite final, Eurozone retail sales, and the Bank of England policy announcement. In North America, reports are scheduled on US jobless claims and US productivity and costs.

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