United States
Bargain-hunting in megacap growth stocks helped equities recover Friday. The Dow Jones industrial average rose 0.6 percent, the S&P 500 gained 0.8 percent, and the NASDAQ was up 1.2 percent.
Tech stocks Microsoft, up 2.6 percent, Apple, up 1.0 percent, and Nvidia, up 5.1 percent, were the day's big winners, with Microsoft rising after an analyst upgrade and news the software leader would raise prices.
Other leaders included communications services, with Spotify, up 5.6 percent after a buyback announcement, while Comcast rose 0.8 percent, and Discovery Channel was up 1.2 percent.
On the downside, materials lagged on weakness in industrial and precious metals on the slowing global growth narrative. Other weak links included health care, consumer staples, financials, and energy. Industrials lagged the most, with Deere, the heavy equipment leader, down 2.2 percent despite an earnings beat, amid caution about the outlook.
Among other companies in focus, Foot Locker, the athletic apparel store, rose 7.3 percent after reporting blowout earnings and same-store sales. Meanwhile, Adobe, the software company, rose 1.5 percent after acquiring Frame.io, a video software company.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 92 cents to US$65.02 while spot gold rose US$1.53 to US$1,782.37. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield declined 1 basis point to 1.87 percent but the 10-year note yield rose 1 basis point to 1.26 percent.
Europe
A better opening on Wall Street helped equities recover from early declines Friday, with a boost from UK retailers. The Europe-wide STOXX 600, the German DAX, and the French CAC all gained 0.3 percent. The UK FTSE 100 rose 0.4 percent.
Despite a better showing Friday, risk appetite has been dented this week by concern about growth and the outlook for Fed policy, worries over the coronavirus, geopolitics, and the Chinese regulatory crackdown.
Among UK retail stocks, Marks & Spencer rose 14 percent Friday on upbeat earnings news, while Wm. Morrison Supermarkets gained 4.2 percent after accepting a cash offer from private equity. In other M&A news, Norway Royal Salmon, the fish farm, gained 13 percent on a takeover bid from its rival, SalMar, which rose 2.8 percent.
Other sectors beating the market included utilities, technology, and telecom. Lagging were autos & parts, food & beverage, basic resources, chemicals, and oil & gas. Autos remained under pressure after Toyota's announcement that it would cut output next month due to parts shortages.
Among companies in focus, Scandinavian Tobacco Group rose 7.9 percent, and Kingspan, the Irish building materials firm, rose 2.0 percent after both beat earnings expectations.
Asia Pacific
Focus on slowing growth and rising Covid-19 case counts, plus the threat of a wider Chinese regulatory crackdown hit equities again Friday. Investors noted that China left its loan prime rate unchanged Friday but market expectations are rising for monetary policy support as business activity has slowed and financial markets have been hit.
Chinese equities were hit again by comments in Chinese state media calling for more government steps to protect consumers, this time in liquor and health care. Investors fretted that the crackdown that has already snared technology, property, and education businesses will continue to widen. The CSI 300 fell 1.9 percent and the Shanghai composite declined 1.1 percent, paced by a selloff in health care/pharma stocks.
Hong Kong's Hang Seng also dropped 1.9 percent. Some big tech stocks saw limited bargain-hunting, with Tencent up 1.0 percent in Hong Kong trading, while Alibaba ended down another 2.6 percent. China Evergrande, the troubled property developer, fell another 1.6 percent Friday for a 14 percent decline over five days, after regulators summoned its executives for a rebuke over the firm's rising debt.
South Korea continued to suffer its own taper tantrum, with the KOSPI down 1.2 percent, as investors reacted to talk that the Federal Reserve will soon scale back its asset purchases. Sentiment was hurt by the deteriorating domestic virus situation and the threat of more restrictions. Big tech stocks continued to pace the declines, with heavy selling from foreign accounts.
Automakers and auto parts suppliers led Japanese markets lower in the wake of Toyota's announcement Thursday that its output would fall next month. The Toyota news added to bearishness over a slowdown linked to the virus wave in Japan, the US, and elsewhere. The Nikkei fell 1.0 percent and the broader Topix lost 0.9 percent. Losses were nearly across the board, with shipping, transportation equipment, and materials stocks hit hardest. Utilities, land transportation, and retailers held up best.
Australia's All Ordinaries index ended down 0.1 percent as sector performance was mixed. Weakness in miners and tech was largely offset by strength in consumer stocks and utilities. BHP fell another 0.7 percent Friday to end down 17 percent for the week after the firm announced plans to unload its energy assets and end its dual listing in London. Miners were already under pressure from falling metals prices on slowdown worries, and Chinese steps to dampen commodities prices. Tech stocks lagged on a selloff in buy-now-pay-later stocks. Among companies in focus, Treasury Wine Estates rose 5.6 percent after upbeat earnings and guidance.
