Daily market review

US firms, Europe mixed on earnings; Asia up on tech stock rally

United States

Positive earnings reports and strength in megacaps helped equities firm Tuesday. The Dow Jones industrial average rose 0.6 percent, the S&P 500 gained 0.7 percent as did the NASDAQ.

Megacaps Apple, up 1.5 percent, and Microsoft, up 0.3 percent, gave the indexes a lift, along with Facebook, up 1.4 percent, and Google, up 0.6 percent.

Among sectors, energy outperformed with rising oil prices, with Chevron up 1.9 percent. Healthcare gained with Johnson & Johnson up 2.3 percent after an earnings beat, and Merck up 3.0 percent on news the World Health Organization will distribute Merck's anti-Covid-19 pill in poor countries.

Among other companies reporting, Travelers gained 1.7 percent and Dover, the manufacturer, rose 0.6 percent after earnings beats. On the downside, Procter & Gamble slipped 1.2 percent to dampen consumer staples after warning about the impact on profits from rising input costs.

Among other stocks in focus, Walmart rose 2.1 percent on an analyst upgrade. Coinbase, the crypto exchange, rose 4.2 percent after news it will work with Facebook on the social network's crypto plans. Homebuilders Pulte, down 0.3 percent, and DR Horton, down 0.2 percent, weighed on consumer discretionary after disappointing US housing starts figures.

In US economic news, housing starts fell 1.6 percent in September to an annual rate of 1.555 million, and permits plunged 7.7 percent to 1.589 million. Both readings were lower than Econoday's consensus expectations of 1.621 million for housing starts and 1.680 million for permits.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 67 cents to US$84.95 while spot gold rose US$5.61 to US$1,770.30. The US dollar declined vs. major currencies. Yields on the US Treasury 30-year bond rose 6 basis points to 2.08 percent, and the 10-year note rose 4 basis points to 1.64 percent.

Europe

Mixed corporate earnings and lower long rates left equities narrowly mixed. The Europe-wide STOXX 600 and the German DAX both edged up 0.3 percent, the French CAC declined 0.1 percent, and the UK FTSE 100 was up 0.2 percent.

Utilities and technology stocks perked up as long rates edged down and the yield curve flattened. Real estate, construction & materials, media, retail, and travel & leisure also outperformed. Lagging were food & beverage, telecom, household & personal goods, autos & parts, and banks.

Among companies in focus, Ericsson, the telecom, fell 3.7 percent, Tele2, another telecom, fell 4.3 percent, and Danone, the food giant, fell 3.0 percent after disappointing quarterly results. On the positive side, Virbac, the animal medicine maker, rose 0.7 percent, and homebuilder Bellway rose 1.6 percent after earnings beats.

Asia Pacific

Asian markets gained Tuesday with growth stocks leading with help from a weaker dollar and Monday's strong showing for tech stocks on Wall Street.

Carry-over strength in tech and reports that China Evergrande and other troubled property businesses made debt payments to domestic bondholders helped Chinese market sentiment. China's CSI 300 index rose 1.0 percent and the Shanghai composite gained 0.7 percent. Rising coal prices remained a big negative, along with expectations for missed debt payments from Evergrande and other property developers. Several analysts downgraded Chinese growth forecasts after Monday's soft economic data.

Hong Kong's Hang Seng index was up 1.5 percent with internets and tech names leading, along with consumer goods and services. On the downside, property developers and real estate investment trusts lagged .

South Korea's KOSPI gained 0.7 percent and Taiwan's Taiex benchmark rose 1.2 percent, with big tech stocks leading the advance.

Overnight tech stock strength boosted Japanese equities with growth stocks better and value lagging. The Nikkei 225 index rose 0.7 percent and the broader Topix rose 0.4 percent. Natural resources, autos, and bank stocks were among the laggards. Among the day's best performers were Softbank, the tech investor, up 3.1 percent, and chipmaker Tokyo Electron, up 1.9 percent, while Toyota Motor was off 0.5 percent and Japan Petroleum Exploration fell 5.1 percent.

Australian equities were mixed with the All Ordinaries unchanged. Value/cyclicals faded while growth stocks outperformed as bond yields eased. Among sectors, miners retreated with commodities prices while liquefied natural gas producers and financials declined. Tech outperformed as buy-now-pay-later stocks perked up while real estate and health care rebounded.

Looking ahead*

In Asia/Pacific, Japanese merchandise trade and Chinese house price index reports are scheduled. In Europe, German PPI, UK CPI, UK PPI, and Eurozone HICP figures are due. In North America, Canadian CPI figures are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies

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