Daily market review

United States

Equities rebounded late with growth stocks leading on upbeat earnings and position adjustments headed into the weekend and month end. The Dow Jones industrial average gained 1.7 percent, the S&P 500 rose 2.4 percent and the NASDAQ rallied 3.1 percent.

Technology and communications services stocks, which have suffered a brutal January, led the way higher as investors shifted back into these sectors at quarter end after weeks of growth lagging value/cyclicals on the threat of Federal Reserve tightening.

Apple surged 7.0 percent to lead the FANMAG complex after beating analyst sales estimates in nearly every category, and saying supply chain issues were improving. Microsoft, up 2.8 percent, bounced back from early losses to end at the day's highs, as did Amazon, up 3.1 percent. Among financials, Visa gained 11 percent on better-than-expected results. Other winners included telecoms, media, and biotechs.

Among value stocks, Caterpillar fell 5.2 percent as investors reacted badly to rising costs despite a big earnings beat. Chevron dropped 3.5 percent after a big earnings miss, and Kroger fell 4.3 percent after an analyst downgrade.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.05 to US$90.57 while spot gold fell US$6.49 to US$1,788.70. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield was unchanged at 2.09 percent, and the 10-year note fell 2 basis points at 1.79 percent.


European equities fell as risk appetite faltered and earnings came in mixed. The Europe-wide STOXX 600 declined 1.0 percent, the German DAX declined 1.3 percent, the French CAC lost 0.8 percent, and the UK FTSE 100 was down 1.2 percent.

Concern about supply chain problems, Russia-Ukraine tensions, the Federal Reserve's hawkish turn, and the prospect of tightening from the European Central Bank and the Bank of England dented equities headed into the weekend. Among sectors, hardest hit were autos & parts, technology, industrials, and banks. Holding up best were retail, travel & leisure, and telecom.

Among stocks in focus, SSAB fell 2.3 percent, Electrolux lost 3.9 percent on weak quarterly results, and VW declined 0.8 percent on worries over parts shortages and delivery delays. On the positive side, H&M rose 5.1 percent and LVMH gained 3.2 percent after earnings beats.

Asia Pacific

Asia/Pacific ended mixed in volatile trading with most markets holding gains amid relief that the heavy selling pressure had abated for now. Chinese markets retreated to end lower after a strong start.

Japanese markets tracked US equity futures higher amid bargain hunting. The Nikkei 225 jumped 2.1 percent and the Topix gained 1.9 percent. Most sectors rose, with value outperforming. Marine shipping, miners, autos, and banks were among the day's best performers.

Mainland Chinese equities gave back early gains to end lower nearly across the board, with growth stocks facing renewed pressure despite efforts by state media and state-owned funds to boost the market. China's CSI 300 index fell 1.2 percent and the Shanghai composite lost 1.0 percent.

Hong Kong gave up early gains with the Hang Seng index closing down 1.1 percent. Losses were across the board with health care and biotech stocks lagging. China Evergrande declined 4.1 percent amid reports the government will break it up, and Hopson Development, another property developer, fell 17 percent after its PwC, its auditor, resigned.

South Korea's KOSPI rose 1.9 percent. Taiwan's stock market was closed ahead of the Lunar New Year.

Australia's All Ordinaries rose 2.1 percent, with buyers seeing markets oversold after a week of heavy losses on rate hike worries. Consumer stocks led the way higher, followed by telecom, health care, industrials, real estate, and financials.

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