Daily market review

United States

A renewed selloff in technology and other growth stocks undercut equities Thursday. Value/cyclicals, after holding firm early, faded into the close. The Dow Jones industrial average fell 0.5 percent, the S&P 500 lost 1.4 percent, and the NASDAQ dropped 2.5 percent.

FANMAG stocks declined with Apple off 1.9 percent, Facebook down 2.0 percent, and Microsoft dropping an eye-popping 4.2 percent. Growth and momentum stocks faced selling pressure as dip-buying ran into hawkish Federal Reserve expectations and elevated inflation readings. Health care sagged with biotech and medical technology weak.

Among industrials, however, Boeing gained 2.9 percent on a Bloomberg report that China may soon allow Boeing to resume sales of its 737 Max jet. Caterpillar advanced 2.1 percent, and Honeywell was up 0.5 percent. Reopening stocks improved, including cruise lines, restaurants and airlines. Delta rose 2.1 percent after issuing a positive travel forecast.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell 66 cents to US$83.88 while spot gold declined US$5.25 to US$1,821.78. The US dollar fell slighty vs. most major currencies. Yields on the US Treasury 30-year bond fell 5 basis points to 2.04 percent, and the 10-year note was down 4 basis points at 1.70 percent.


European equities were split on mixed company news. The Europe-wide STOXX 600 was flat, the German DAX firmed 0.1 percent, the French CAC fell 0.5 percent, and UK FTSE 100 gained 0.2 percent.

Among sectors, autos & parts, banks, travel & leisure, insurance, and basic resources outperformed, while lagging were personal & household goods, retail, health care, and industrials.

Several retailers reported disappointing trading results, including Marks & Spencer, down 7.9 percent, and Tesco, down 1.2 percent.

Among companies in focus, Countryside, the builder, dropped 21 percent after disappointing results and news its CEO would step down. Suedzucker, the sugar company, fell 1.4 percent on disappointing guidance. Asos, the online clothing retailer, rose 11 percent after saying it would advance to a premium listing on the main market at the London Stock Exchange.

Asia Pacific

Equities weakened Thursday with growth sectors lagging after US equities on Wednesday ended mixed following US consumer price data and more hawkish Fed comments.

Chinese were also hurt by fallout from Chinese lockdowns intended to combat the spreading Omicron variant. China's CSI 300 index fell 1.6 percent and the Shanghai composite lost 1.2 percent. Most sectors weakened, with real estate and consumer staples lagging and energy holding up best.

Hong Kong recovered session losses at the close with the Hang Seng index up 0.1 percent as oil & gas stocks advanced while health care lagged.

Japanese equities sagged on surging coronavirus cases at home and Wednesday's rise in US bond yields. The Nikkei 225 fell 1.0 percent and the Topix lost 0.7 percent. Growth lagged. Among sectors, services, precision instruments, retail, and land transportation came off the most. Automakers, banks, and materials outperformed, with metals up on rising commodity prices.

South Korea's KOSPI declined 0.4 percent amid tech stock weakness. Taiwan Taiex rose 0.3 percent on strength in computer hardware.

Mining stocks lifted Australian equities on rising commodities prices with the All Ordinaries up 0.5 percent. Utilities and energy also advanced. Health care, tech, and consumer discretionary stocks lagged. Among companies in the news, Crown Resorts rallied 8.8 percent after Blackstone raised its takeover bid.

Looking ahead*

In Asia/Pacific, Japanese PPI, Indian merchandise trade, Indian wholesale price index, and the Bank of Korea policy announcement are scheduled. In Europe, UK industrial production, UK merchandise trade, UK monthly GDP, French CPI, and Eurozone merchandise trade reports are on tap. In North America, US retail sales, US import & export prices, US industrial production, US business inventories, and US consumer sentiment reports are due.

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