Daily market review

US flat to weaker; Europe better as travel stocks rise; Asia off again

United States

Major stock indexes ended flat to slightly lower after recovering from morning lows but most sectors declined as buying interest fizzled despite upbeat US economic data. The Dow Jones industrial average and the S&P 500 both eased 0.2 percent and the NASDAQ firmed 0.1 percent.

Investors appeared unimpressed by a surprisingly strong US retail sales report, another upbeat Philadelphia Federal Reserve manufacturing survey, and an acceptable weekly US jobless claims report. Among sectors, energy stocks fared worst as they gave back some recent gains. Materials were hurt by declining industrial and precious metals prices. Weakness in household products weighed on consumer staples, and megacap internet stocks hurt communications services. Tech lagged with software and chipmakers off.

Holding up best were real estate and consumer discretionary, with Amazon recovering from initial declines to end up 0.3 percent. Financials outperformed with help from an uptick in bond yields.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 17 cents to US$75.68 while spot gold fell US$39.67 to US$1,754.12. The US dollar rose vs. most major currencies. The US Treasury 30-year bond yield rose 2 basis points at 1.88 percent and the 10-year note yield gained 3 basis points to 1.34 percent.

In US economic news, jobless claims rose 20,000 to 332,000 in the week ended September 11, more than expected, but the four-week moving average was nearly steady. In spite of some week-to-week moves, the level of jobless claims has been steadily trending lower.

Separately, September's Philadelphia Fed manufacturing index exceeded expectations, at 30.7 and well over Econoday's consensus range. Finally, retail sales surprised on the upside in August, as they rebounded 0.7 percent from July, in contrast with expectations for a decline of 0.8 percent.

Europe

Company news helped major equities indexes end higher, with travel stocks and industrials leading while miners and autos lagged. The Europe-wide STOXX 600 rose 0.4 percent, the German DAX edged up 0.2 percent, the French CAC gained 0.6 percent, and the UK FTSE-100 firmed by 0.2 percent.

Ryanair, up 7.8 percent, led airlines higher after the budget airline raised its long-term growth guidance. Lufthansa, up 1.1 percent, was another winner after its CEO said it will boost capacity as business travel rebounds. Aerospace and defense stocks got a lift from news of the US/UK plans to furnish submarines to Australia, and British Aerospace rose 1.0 percent on news the UK will pay for two large maritime projects.

On the downside, miners lagged on commodity price weakness, with BHP off 3.4 percent and Anglo American down 4.6 percent. Auto stocks lagged too as the industry struggles with parts shortages, with Volkswagen down 1.1 percent and Porsche off 1.8 percent. European Automobile Manufacturers data showed big declines in new auto registrations in August. Utilities remained under pressure as they are being squeezed between rising energy prices and expectations that regulators will limit price increases.

Among companies in focus, Lagardere rose 19 percent on news media giant Vivendi will add to its stake in the French magazine publisher.

Asia Pacific

Asian equities weakened with Chinese markets in focus again as property and banking stocks extended their selloff and China's regulatory crackdown continued.

Hong Kong equities bore the brunt of the Chinese selloff again, with losses across the board and the Hang Seng index off 1.5 percent. Gambling stocks dropped for a second day on concern over threatened curbs on gaming businesses. China Evergrande fell another 6.4 percent to lead property and bank stocks lower as the troubled property developer struggled to stay current on its debt.

Among mainland Chinese indexes, the CSI 300 fell 1.2 percent and the Shanghai composite lost 1.3 percent. Lagging were industrials and materials while consumer staples and health care rose and rising oil prices gave energy stocks a lift.

South Korean equities sagged with the KOSPI off 0.7 percent as big tech stocks retreated. Separately, Taiwan's benchmark Taiex declined by 0.4 percent.

Japanese markets declined for a second day as equities consolidated recent gains and on spillover from Chinese market weakness. The Nikkei fell 0.6 percent and the broader Topix eased 0.3 percent, with big tech growth stocks notably lower. Other laggards included marine transportation, real estate, and glass & ceramics. Natural resources, warehousing, and food stocks held up best.

Australian equities outperformed the region as investors reacted to an easing in anti-virus restrictions for vaccinated people in New South Wales, the largest Australian state. Equities recovered on the reopening trade after an initial selloff after weak Australian employment figures.

Australian equity gains were nearly across the board, with the All Ordinaries up 0.5 percent. Among sectors, energy outperformed on rising liquefied natural gas prices while banks boosted financials and building materials lifted industrials. On the downside, weakness in big retailers dampened consumer discretionary stocks and materials fell with lower iron ore prices.

Looking ahead*

In Asia/Pacific, Singapore merchandise trade figures are due for release. In Europe, Eurozone HICP and UK retail sales reports are scheduled. In North America, US consumer sentiment is on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

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