Dow Today – U.S. stocks rise ahead of earnings; oil pares increases
U.S. stocks rose as traders geared for a string of earnings reports from technology heavyweights including Facebook Inc., while keeping in mind inflation concerns and rising COVID-19 risks.
Energy and materials sectors led the S&P 500 higher after the benchmark index whipsawed traders at the start of the session. PayPal Holdings Inc. rose after the company said it isn’t pursuing an acquisition of Pinterest Inc., ending days of speculation over a potential US$45 billion deal. Tesla Inc. advanced after receiving an order for 100,000 cars from Hertz Global Holdings Inc. Still to come: the five largest U.S. technology companies are set to report earnings, starting with Facebook on Monday.
“So with the market demonstrating that it’s favoring earnings reports over economic reads,” said Chris Larkin, managing director of trading at E*TRADE Financial. “We could be in for a ride this week with a deluge of big tech earnings—some of the biggest market-cap companies out there.”
Yields on shorter-maturity Treasuries fell and the dollar was little changed after Federal Reserve Chair Jerome Powell flagged that inflation could stay higher for longer, fueling investor concern that sticky price increases may force policy makers to raise borrowing costs.
The Stoxx Europe 600 index edged higher. The basic-resources sector advanced as crude oil and metals rose, while banks increased on HSBC Holdings Plc’s bright outlook. Spain’s Banco de Sabadell SA jumped after rejecting an offer for its UK. unit.
Global equities have remained resilient despite risks from price pressures stoked by supply-chain bottlenecks and higher energy costs. Treasury Secretary Janet Yellen is among those counseling the inflation situation reflects temporary pain that will ease in the second half of 2022. Investors are wary that tighter monetary policy to keep inflation in check will stir volatility.
Traders are also monitoring an outbreak of the delta virus strain in China that is expected to worsen. The nation sought to allay concerns about the economy’s slowdown with a lengthy state media commentary outlining how the government is managing risks and remains confident about achieving its targets for the year.
Gold advanced above US$1,800 an ounce. Saudi Arabia said that the OPEC+ alliance should maintain its cautious approach to managing global crude supplies given the threat to demand still posed by the pandemic. Bitcoin advanced toward US$63,000.
Here are some events to watch this week:
- Earnings: Amazon, Apple, Facebook, Microsoft, Twitter, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group
- Australia CPI, Wednesday
- U.S. wholesale inventories, U.S. durable goods, Wednesday
- Bank of Japan monetary policy decision, briefing, Thursday
- ECB rates decision, President Christine Lagarde briefing, Thursday
- U.S. GDP, initial jobless claims, Thursday
- G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday
Some of the main moves in markets:
- The S&P 500 rose 0.5 per cent as of 12:10 p.m. New York time
- The Nasdaq 100 rose 0.8 per cent
- The Dow Jones Industrial Average rose 0.3 per cent
- The MSCI World index rose 0.3 per cent
- The Bloomberg Dollar Spot Index rose 0.1 per cent
- The euro fell 0.3 per cent to US$1.1608
- The British pound was little changed at US$1.3766
- The Japanese yen fell 0.2 per cent to 113.72 per dollar
- The yield on 10-year Treasuries was little changed at 1.63 per cent
- Germany’s 10-year yield declined one basis point to -0.11 per cent
- Britain’s 10-year yield was little changed at 1.14 per cent
- West Texas Intermediate crude rose 0.4 per cent to US$84.06 a barrel
- Gold futures rose 0.8 per cent to US$1,810 an ounce