Strength in Apple and Microsoft and well-received earnings reports helped offset broader weakness Tuesday. The Dow Jones industrial average and the S&P 500 firmed 0.4 percent, and the NASDAQ was up 0.3 percent, all new record highs. The DJIA closed above 36,000 for the first time.
Best sectors were tech, with Apple up 0.7 percent, Microsoft up 1.1 percent, and Cisco up 2.7 percent. Arista, the computer networking company, surged 20 percent after an earnings beat and share buyback. Among other companies with big earnings beats, Avis Budget Group rallied 108 percent.
Materials outperformed, with Dupont up 8.7 percent. Consumer staples advanced, with Estee Lauder up 4.1 percent, and Clorox up 1.2 percent, after topping estimates. Health care got a lift from Pfizer, up 4.2 percent, on its banner vaccine sales.
On the downside, Tesla fell 3.0 percent after founder Elon Musk said it has not yet signed a deal to sell cars to Hertz, despite Hertz's announcement. Cummins, the truckmaker, fell 1.2 percent after an earnings miss, with a big hit from supply disruptions. Chegg, the online education firm, plunged 49 percent after an earnings miss and lower subscriber numbers.
Markets are anticipating the Federal Reserve policy announcement Wednesday, with expectations firm for the Fed to announce the start of its tapering of asset purchases. Risk assets have been bolstered by the view that any actual rate increases are far off, but the worry headed into the press conference is that Fed Chair Jerome Powell will suggest rate increases are coming sooner than currently projected.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil declined 2 cents to US$84.52 while spot gold declined US$4.98 to US$1,787.82. The US dollar rose against most currencies but not vs. the yen. Yields on the US Treasury 30-year bond declined 1 basis point to 1.96 percent, and the 10-year note was down 1 basis point at 1.53 percent.
Equities traded mixed with focus on earnings and caution ahead of policy announcements from the Bank of England and the Fed, plus US jobs data later in the week. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX gained 0.9 percent, the French CAC rose 0.5 percent, and the UK FTSE 100 eased 0.2 percent.
Energy and basic resources trailed as commodities slipped. Heavily weighted BP, down 2.3 percent, and Royal Dutch Shell, down 0.6 percent, depressed UK stocks, along with miners Glencore, down 3.1 percent, and Rio Tinto, down 2.2 percent. Travel & leisure lagged, with Flutter Entertainment, the bookmaker, down 5.0 percent after an earnings miss and weaker guidance.
On the positive side, health care outperformed, with Fresenius, the dialysis company, up 2.2 percent on an earnings beat, and Demant, the hearing aid maker, up 3.6 percent on better guidance. Maersk, the shipping giant, rose 3.5 percent after topping profits expectations despite port congestion. HelloFresh, the meals delivery business, rose 17 percent on an earnings beat and high order rates.
Asian equities were mostly weaker with markets tentative ahead of a heavy earnings period and central bank news including the Federal Reserve's announcement due Wednesday.
Signs of trouble at more property firms and a reserve drain from the People's Bank of China weakened Chinese markets. Hardline Chinese steps to contain Covid-19 outbreaks also hurt risk appetite, including a government call on families to stock up on food headed into winter. China's CSI 300 index lost 1.0 percent and the Shanghai composite fell 1.1 percent with property, financials, and energy off sharply. Hong Kong's Hang Seng index eased 0.2 percent with health care, biotech, and property shares lagging while internets and tech stocks outperformed.
Disappointing earnings depressed equities but activity was limited ahead of the Fed policy news. The Nikkei 225 index declined 0.4 percent and the broader Topix was off 0.6 percent. Financials, iron & steel, and other industrials lagged the most, along with pharma and transportation equipment.
Separately, South Korea's KOSPI rose 1.2 percent and Taiwan's Taiex benchmark was flat.
A downtick in US equity futures depressed Australian equities with the All Ordinaries index down 0.6 percent. The Reserve Bank of Australia's policy announcement matched expectations, including the RBA decision to scrap its yield curve targeting. Speaking at a post-meeting press conference, RBA Governor Phillip Lowe was non-committal about the timing of a policy-rate increase but dismissed suggestions that it could occur as soon as next year. He described as "plausible" the suggestion that rates might be raised in 2023 but also used the same word to describe the possibility that rates remain on hold until 2024.
In Asia/Pacific, New Zealand Labour Market Conditions, Hong Kong PMI, Japan PMI composite final, Singapore PMI, China PMI composite, and Indian PMI composite reports are scheduled. In Europe, UK PMI composite final, and Eurozone unemployment rate reports are due. In North America, the Fed policy announcement and Fed chair press conference are the main events. Additionally, US ADP employment, US PMI composite final, US factory orders, and US ISM services reports are on tap.