Stocks Edge Lower After Dramatic Rally
April 22 2021 - 10:49AM
Dow Jones News
By Joe Wallace
U.S. stock slid Thursday as investors parsed through another
batch of earnings and data on the labor market.
The S&P 500 dropped 0.2% shortly after the opening bell. The
technology-heavy Nasdaq Composite slipped 0.1%. The Dow Jones
Industrial Average fell 0.4%.
The declines come after stocks jumped on Wednesday, reversing
losses from earlier in the week. Many investors remain upbeat about
the outlook for shares, but are growing concerned that a surge in
coronavirus cases globally could delay plans to reopen economic
activity. India on Thursday reported the world's biggest one-day
rise in new infections.
"It wouldn't take much news for [investors] to start ripping up
their reopening playbook," said Christopher Jeffery, head of
inflation and rates strategy at Legal & General Investment
Management. "The market has gone from a world of not questioning it
to starting to question it," he said, adding that his team is
following the rise in cases in Michigan closely.
Earnings season continues apace.
Shares of Equifax jumped 16% after the credit-reporting agency
late Wednesday raised financial projections for the year and said
it expects to buy back more than $100 million worth of stock.
Blackstone Group shares gained 2.4% after the private-equity
firm swung to a record profit of $1.75 billion in the first
quarter.
Intel and Snap are among companies scheduled to report results
after markets close.
On the economic front, worker filings for jobless claims reached
another Covid-19 low of 547,000 last week. The decline is a sign
the labor market is strengthening.
Bond yields steadied. The 10-year U.S. Treasury yield ticked
down to 1.561% from 1.566% Wednesday. Yields, which move in the
opposite direction to bond prices, have fallen from a high of
1.749% in late March.
Jason Borbora-Sheen, multiasset portfolio manager at Ninety One,
said he expects the broad stock market to trend sideways or decline
over the next few months. "Things have become quite overbought," he
said.
One of the two funds Mr. Borbora-Sheen manages has bought put
options to protect against downward moves in stocks. Puts are
contracts that pay out if the underlying asset falls below a
certain price.
In overseas markets, shares of tech and utility companies led
the Stoxx Europe 600 up 0.5%.
Shares of Credit Suisse Group fell 2.5% after the Swiss lender
said it would issue new shares after losses from Archegos Capital
Management wiped out a strong first quarter. Renault shares lost 2%
after the French car maker said revenue fell in the first
quarter.
The European Central Bank left its key interest rates and
bond-buying programs unchanged, seeking to maintain support for
governments and companies through a new round of coronavirus
infections and restrictions. The euro edged down 0.1% to
$1.2027.
In Asia, chemical and pharmaceutical stocks helped Japan's
Nikkei 225 climb 2.4%. China's Shanghai Composite Index ticked down
0.2%.
-- Amber Burton contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
April 22, 2021 10:34 ET (14:34 GMT)
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