Global Stocks Waver After Earnings-Driven Jump
April 24 2019 - 5:24AM
Dow Jones News
By Georgi Kantchev
Global stock markets paused Wednesday on concerns about the
health of the world economy, a day after strong earnings propelled
U.S. stocks to new highs.
In Europe, the Stoxx Europe 600 was down 0.2%, following losses
across most Asian markets.
Futures pointed to opening losses of 0.1% for the S&P 500
and the Dow Jones Industrial Average.
The S&P 500 registered its first record-high close of 2019
on Wednesday, while the Dow is within less than a percentage point
of an all-time high.
Data released Wednesday showed German business sentiment fell in
April, indicating that Europe's biggest economy continues to lose
steam. The Ifo Institute said its business climate index declined
to 99.2 from a revised 99.7 points in March. Economists polled by
The Wall Street Journal had forecast a small increase in the index
to 99.9 points this month.
Analysts said Wednesday that concerns China may slow the pace of
policy easing following stronger-than-expected first-quarter growth
is also dampening investor sentiment. Traders were monitoring the
latest moves in trade negotiations between Beijing and Washington,
which are slated to restart next week.
Wednesday's subdued market moves came as strong earnings boosted
stocks earlier this week, in a year marked by a more accommodative
Federal Reserve and a stable economy. The rally marked a strong
reversal from the fourth quarter of 2018 when a selloff dragged the
Nasdaq into bear-market territory and left the S&P 500
teetering on the edge of ending its longest bull run ever.
"The equity market rally continues...nonetheless, short term
corrections are likely, as is higher volatility, even as markets
grind higher in the coming months, because plenty of risks remain,"
including European growth, said Esty Dwek, senior investment
strategist at Natixis Investment Managers.
In recent days, companies like Twitter, aerospace giant Lockheed
Martin and industrial conglomerate United Technologies have
reported solid results. Investors have been looking to the earnings
season for clues about the strength of businesses and the
economy.
"Earnings expectations were dialed down. It turns out things are
much better," said Randy Warren, chief investment officer of
Philadelphia-based Warren Financial. "Markets have the support to
go higher."
Of the 104 companies in the S&P 500 to report results so
far, 78% have beaten analysts' expectations, compared with about
65% in the fourth quarter, according to data from Refinitiv. The
bar is significantly lower, however, after steep downgrades to 2019
earnings forecasts in recent months.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was up 0.2%. The 10-year U.S. Treasury yield was
down at 2.545% from 2.570% on Tuesday. Yields move inversely to
prices.
In Asia, Hong Kong's Hang Seng fell 0.5% while Japan's Nikkei
was down 0.3%.
In commodities, Brent crude, the global oil benchmark, was down
0.4%, while gold prices rose 0.2%.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
April 24, 2019 05:09 ET (09:09 GMT)
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