United States
Negative surprises from Apple and Amazon weighed on equities Friday but other megacaps held up well to limit the declines, and a late round of buying lifted the indexes into positive territory. The Dow Jones industrial average gained 0.3 percent, the S&P 500 rose 0.2 percent, and the NASDAQ was also up 0.3 percent
Consumer discretionary lagged with Amazon down 2.2 percent after a big earnings miss due mostly to rising input costs. Apple, down 1.8 percent, weighed on technology stocks after blaming supply disruptions for its unusual revenues miss, but strength in Microsoft, up 2.2 percent, offset the effect. Declining oil prices hurt energy stocks; Chevron managed to rise 1.2 percent and Exxon Mobil gained 0.3 percent after upbeat quarterly results. Utilities and real estate investment trusts trailed.
On the positive side, megacap internets led the market, with Google up 1.5 percent and Facebook up 2.1 percent. Consumer staples were strong too, with grocers up, including Kroger, up 0.9 percent. Materials rose, with industrial metals better, and US Steel rallying 13 percent after an earnings beat and raising its dividend. Health care and financials were mixed. Pfizer gained 1.3 percent after its Covid vaccine was approved for use by children.
In US economic news, personal income declined 1.0 percent in September from August, on the low end of the Econoday survey of forecasts, but the drop was due to special factors. Personal consumption expenditures rose 0.6 percent in September. The PCE deflator posted a 4.4 percent year-over-year increase in September as commodities prices continued their upward push. The core PCE deflator remained at 3.6 percent year-over-year for a fourth straight month.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 5 cents to US$84.38 while spot gold fell US$15.50 to US$1,782.85. The US dollar rose vs. major currencies. Yields on the US Treasury 30-year bond fell 5 basis points to 1.92 percent, and the 10-year note was down 3 basis points at 1.54 percent.
Europe
A split sector showing left equities narrowly mixed as markets reacted to rising bond yields and falling commodities prices. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX eased 0.1 percent, the French CAC rose 0.4 percent, and the UK FTSE 100 was down 0.2 percent.
Among sectors, best were insurance, autos & parts, banks, and chemicals. Lagging were utilities, telecom, oil & gas, basic resources, and travel & leisure. Among companies in focus. Eni, the Italian energy leader, rose 2.0 percent after an earnings beat, and Banco Bilbao Vizcaya rallied 7.5 percent on very strong operating results. On the downside, GN Store Nord fell 8.3 percent after missing on all its metrics.
On a busy day for economic reports, inflation came in hot, with Eurozone HICP (harmonised index of consumer prices) above expectations in October, at a 4.1 percent year-over-year rate versus expectations for 3.7 percent. But showing much less upward pressure were both the narrow core (excluding energy, food, alcohol and tobacco) and the underlying core (excluding energy and unprocessed food), both at 2.1 percent annual rates and both up only 2 tenths from September's annual rates.
Asia Pacific
Asian equities were mixed with mainland China outperforming while Australia lagged.
Growth stocks led Chinese markets mostly higher though property stocks suffered again. China's CSI 300 index gained 0.9 percent and the Shanghai composite rose 0.8 percent. Among sectors, best were information technology, health care, and industrials.
Hong Kong's Hang Seng index slipped 0.7 percent on weakness in tech stocks. Separately, South Korea's KOSPI lost 1.3 percent on a mix of disappointing earnings and weak economic data. Taiwan's Taiex benchmark slipped 0.3 percent.
Positive earnings news helped Japanese stocks recover initial declines. The Nikkei 225 index rose 0.3 percent and the broader Topix firmed 0.1 percent. Activity was limited by caution before the weekend elections, which are expected to return the ruling coalition to power.
Australian equities slipped on rising yields fueled by inflation worries with the All Ordinaries index down 1.3 percent. Financials and energy shares lagged the most.
