Daily market review

United States

Bargain-hunting centered in growth stocks helped major stock averages recover Thursday with technology stocks leading. The Dow Jones industrial average gained 1.0 percent, the S&P 500 gained 1.4 percent, and the NASDAQ rose 1.9 percent.

Most FANMAG stocks recovered after losses on Wednesday. Chipmakers led technology higher, paced by a rally in Nvidia, up 9.8 percent, and Intel, up 6.9 percent, after reports that Nvidia may use Intel as its chip foundry amid expectations for a ramp-up in US chip manufacturing. Communications services stocks advanced, with Meta/Facebook up 2.9 percent, and Discovery Communications up 1.9 percent.

Surging steel prices lifted United States Steel, up 6.5 percent, and electric vehicles lifted autos, including Nikola, the EV maker, up 5.7 percent on news it started building trucks at its plant in Arizona. Fallout from the Ukraine conflict lifted fertilizer stocks again, with Nutrien up 1.2 percent for a gain of 8.8 percent over the last five days. Materials stocks have benefited as some investors come to see them as an inflation hedge.

Energy stocks lagged as oil prices fell back, with Halliburton, the oil servicer, down 1.0 percent. Several other energy plays traded higher, including Baker Hughes, another servicer, up 1.9 percent, as many analysts predict Brent crude will reach $150 a barrel on Ukraine effects.

Among other companies in the news, Uber rose 5.0 percent after announcing it will feature New York City taxis in its ride-sharing app. Logitech, the hardware company, gained 7.6 percent after an analyst upgrade. Gamestop, the meme stock, rebounded from an early selloff to end up 1.0 percent as day-traders bought the dip.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$3.39 to US$118.10 while spot gold rose US$15.59 to US$1,962.13. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield rose 4 basis points to 2.56 percent, and the 10-year note yield rose 7 basis points to 2.36 percent.


Equities were flat to weaker as investors eyed NATO and US-EU meetings and reacted to mixed company news. The Europe-wide STOXX 600 declined 0.2 percent, the German DAX eased 0.1 percent, the French CAC lost 0.4 percent, and the UK FTSE 100 gained 0.1 percent.

Investors are ratcheting up expectations for Federal Reserve tightening as elevated prices for oil and other commodities add to inflation concerns. Markets are also reacting badly as more companies report a range of disruptions due to the Ukraine conflict and Western efforts to isolate Russia. The day's European economic data, including the Eurozone purchasing managers report, suggested strong growth amid, however, surging input and output prices.

Sectors were mixed with real estate, travel & leisure, and retail stocks lagging while energy and telecom advanced. Among retail stocks, Rose, the drug retailer, fell 13 percent after an earnings miss and weaker guidance. Next, the clothing retailer, lost 3.0 percent. Auto stocks came under pressure with Renault down 0.8 percent after shutting its Russian operations.

On the positive side, Daimler Truck gained 9 percent after predicting strong growth and limited Ukraine effects. Telecom stocks got a boost from Italy Telecom, up 8.4 percent, as speculation continues that KKR will buy the company.

Asia Pacific

Asia-Pacific equities were mixed Thursday with Chinese shares weakening while Japan and Australia edged up.

Chinese markets retreated with tech stocks softer after recent gains. Risk appetite suffered as investors focused on new US warnings to China not to help Russia evade sanctions. The CSI 300 index and the Shanghai index both lost 0.6 percent. The Hong Kong Hang Seng index slipped 0.9 percent with tech stocks lagging. Tencent fell 5.9 percent after reporting much lower-than-expected growth reflecting China's regulatory crackdown.

Japanese markets recovered from initial declines to end slightly higher as US equity futures improved during the Asian hours after Wednesday's selloff on Wall Street. Japan's Nikkei 225 rose 0.3 percent and the wider TOPIX firmed 0.1 percent. Best sectors were metals, mining, and autos while marine shipping and banks lagged.

The Taiwan Taiex and the South Korean KOSPI both declined 0.2 percent as tech stocks fell. The Indian BSE Sensex lost 0.2 percent.

Australian equities were mixed with energy and materials rising as underlying commodities gained on supply worries linked to the Ukraine conflict. Tech, health care, and financials lagged. The All Ordinaries index firmed 0.1 percent. Market sentiment remains under pressure inflation concerns, supply chain disruptions, and expectations for even more aggressive rate increases.

Looking ahead*

In Asia/Pacific, Singapore industrial production figures are scheduled. In Europe, reports are due on UK retail sales, German Ifo survey, Eurozone M3, and Italian business and consumer confidence. In North America, US consumer sentiment and pending home sales reports are on tap.

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