U.S. Stocks Snap Two-Day Losing Streak--Update
April 21 2021 - 04:58PM
Dow Jones News
By Caitlin Ostroff and Gunjan Banerji
U.S. stocks bounced higher after two consecutive days of
declines.
Investors had recently put the brakes on what had been a furious
rally in stocks in recent weeks, leaving the major indexes hovering
near records. Some of the caution eased on Wednesday, as stocks
jumped and recouped some of their losses.
The S&P 500 gained 38.48 points, or 0.9%, to 4173.42, with
gains accelerating later in the session. The tech-heavy Nasdaq
Composite added 163.95 points, 1.2%, to 13950.22. The Dow Jones
Industrial Average added 316.01 points, or 0.9%, to 34137.31.
Some analysts said the recent stretch of declines was a healthy
pause for stocks and that there are bigger gains ahead.
"I think that the market will continue to grind higher," said
Mike Lewis, head of U.S. equities cash trading at Barclays.
Investors are also closely monitoring earnings to see if the
current valuations of expensive stocks can be justified.
Netflix was the biggest loser in the S&P 500 after the
company said subscriber growth for the first quarter was weaker
than expected. The company's shares fell $40.67, or 7.4% to
$508.90.
Still, declines in shares of Netflix and other tech giants like
Facebook were outweighed by gains in shares of more cyclical
companies like cruise-operators and retailers. And some analysts
have said these groups can continue to outperform. JPMorgan Chase
strategists said in a note to clients on Tuesday that they expect
cyclical sectors like energy and financials stocks to perform
well.
Norwegian Cruise Line was one of the best performers in the
S&P 500 on Wednesday, adding $2.76, or 10%, to $29.51. Carnival
advanced $1.61 to 6.3%, to $27.33.
In bond markets, the 10-year U.S. Treasury yield edged up to
1.566%, from 1.562% on Tuesday. Yields rise as prices fall.
Still, a new wave of Covid-19 infections is sweeping through a
number of countries including India and Japan, raising the prospect
of fresh hurdles to the anticipated global economic rebound. Health
authorities are also warning that new variants may emerge that are
resistant to the existing batch of coronavirus vaccines.
"There are still risks in this market, particularly as it
relates to the vaccine rollout and virus mutations," said Shoqat
Bunglawala, head of international multiasset investments at Goldman
Sachs Asset Management. "We're still likely to be in an environment
with some volatility."
Overseas, the pan-continental Stoxx Europe 600 ticked 0.7%
higher after its biggest one-day drop since late December.
In Asia, most major stock indexes closed lower. Japan's Nikkei
225 fell 2%, while Hong Kong's Hang Seng declined 1.8%. The
Shanghai Composite Index ended the day relatively flat.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Gunjan
Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
April 21, 2021 16:43 ET (20:43 GMT)
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