S&P 500 Opens Lower After Index Hits Record
April 12 2021 - 10:01AM
Dow Jones News
By Joe Wallace
U.S. stocks slipped Monday, a muted opening for major indexes
that stand near record highs ahead of a busy week of corporate
earnings and economic data.
The S&P 500 edged down 0.2% after the benchmark stocks gauge
posted its 20th all-time closing high of 2021 on Friday. The Dow
Jones Industrial Average, which also closed out last week at a
record, ticked down 0.3%. The technology-heavy Nasdaq Composite
Index slid 0.3%.
Shares of technology giants have taken back control of the rally
in U.S. stocks over the past month, helping to push major indexes
to a series of all-time highs. Investors' concerns about owning
shares that are sensitive to rising interest rates have been
assuaged by a retreat in yields on U.S. government bonds. Some say
the shift into economically-sensitive sectors went too far at a
time when major economies like the European Union and India are
grappling with fresh coronavirus outbreaks.
Investors on Monday said they were positioning for the start of
earnings season, as well as data that will help to gauge whether a
coming burst of inflation will prove transitory. Inflation data due
on Tuesday are expected to show consumer prices picked up in
March.
"All of these things need to deliver in quite a Goldilocks
manner for the current gains to remain intact," said Edward Park,
chief investment officer at U.K. investment firm Brooks Macdonald.
There is "a bit of a question mark in markets just saying: We're
seeing strong gains; is this quite right?" Mr. Park said.
Ahead of the opening bell, shares of Nuance Communications
jumped about 20%. Bloomberg News reported that Microsoft was in
advanced talks to buy the artificial-intelligence company for about
$16 billion.
American depository receipts for Alibaba Group rose 6% in
premarket trading after companies founded by billionaire Jack Ma
announced changes to operations and structure to placate
regulators. Alibaba said Monday it would invest in measures to
support merchants on its platform, two days after China's antitrust
regulator imposed a record fine. Later on Monday,
financial-technology giant Ant Group said it would apply to become
a financial holding company overseen by China's central bank.
Ingersoll-Rand shares gained 3.8% before the bell. The
manufacturer said it had agreed to sell its unit that makes golf
carts and other vehicles to Platinum Equity for $1.68 billion.
In bond markets, the yield on 10-year Treasury notes ticked up
to 1.667%, from 1.664% Friday. Yields, which move in the opposite
direction to bond prices, have fallen back from their closing high
of 1.749% in late March, but are still up from a low of 0.915% in
early January.
Brent-crude futures, the benchmark in international energy
markets, rose 1.2% to $63.68 a barrel. The Organization of the
Petroleum Exporting Countries is due to release a regular forecast
of global supply and demand of oil Tuesday. Rising Iranian crude
exports and an increase in U.S. drilling activity prompted analysts
at Morgan Stanley to cut their forecast for Brent prices in the
third quarter to a range of $65-$70 a barrel.
In overseas markets, European stocks edged down 0.2%, led by
shares of retail companies.
Among individual European equities, shares of Suez rose roughly
8% in Paris after the French waste and water management company
said Monday that it had agreed to merge with Veolia Environnement.
Shares of French utility Veolia rose over 8%.
Stocks pulled back in major Asian markets. China's Shanghai
Composite fell 1.1% by the close and Japan's Nikkei 225 lost
0.8%.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
April 12, 2021 09:46 ET (13:46 GMT)
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