Drop in Commodities Damps U.S. Stocks -- 4th Update
May 04 2017 - 10:36AM
Dow Jones News
By Riva Gold and Akane Otani
U.S. stock indexes edged lower Thursday, pressured by a steep
drop in commodity prices.
The Dow Jones Industrial Average fell 25 points, or 0.1%, to
20933 shortly after the opening bell. The S&P 500 slid 0.1%,
and the Nasdaq Composite lost 0.1%.
Major stock indexes have climbed the past few weeks as quarterly
earnings results have pointed to health among U.S. corporations.
The U.S. posted the biggest improvement in its revision ratio --
which measures the ratio of upward and downward earnings estimates
by analysts -- of all regions in April, according to Bank of
America Merrill Lynch.
Solid earnings could help stocks keep advancing, investors and
analysts say, even as many trim their expectations for tax cuts and
fiscal stimulus from the Trump administration.
Government bonds slipped Thursday, with the yield on the 10-year
U.S. Treasury note rising to 2.365%, according to Tradeweb, from
2.309% on Wednesday. Yields rise as bond prices fall.
Commodity prices slid across the board, putting pressure on
shares of energy companies. U.S. crude oil fell 2% to $46.88 a
barrel, deepening its losses for the year.
Elsewhere, European stocks rose after data pointed to continued
strength in the eurozone economy. The Stoxx Europe 600 rose 0.4%
after a measure of activity in the eurozone's manufacturing and
services sectors rose to a six-year high and retail-sales figures
improved.
Earnings reports also pushed European stocks higher, with shares
of Royal Dutch Shell up 1.1% after the energy giant said
first-quarter profit more than quadrupled from a year ago.
"For the first time since the European sovereign-debt crisis
broke out, we have a synchronized economic upswing in almost all
continental European economies," said Frank Engels, head of
multiasset portfolios at Union Investment.
Earlier, a global decline in metals prices gained speed in Asian
trading Thursday amid concerns about Chinese demand for commodities
such as steel and iron. China's iron-ore futures opened at the 8%
limit drop, while copper futures fell 1.9% and gold slid 1.6%.
A measure of service-sector activity in China hit its lowest
level in nearly a year for April on Thursday, adding to concerns
about the country's economic health, though it remained in
expansion territory.
"China has been gradually but appreciably tightening credit,"
said Tina Byles Williams, chief investment officer and chief
executive at FIS Group, noting that is slowly showing up in
economic data and metal prices.
"I don't see catastrophe, but I do think there's a lot of
complacency in emerging-market assets around China," she said.
The Shanghai Composite Index fell 0.3%, ending lower for a third
straight session. South Korean equities powered to record highs,
adding 1% Thursday as index heavyweight Samsung advanced. Japan's
markets were closed for a holiday.
Write to Riva Gold at riva.gold@wsj.com and Akane Otani at
akane.otani@wsj.com
(END) Dow Jones Newswires
May 04, 2017 10:21 ET (14:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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