Stocks Waver Ahead of Economic Data
By Anna Hirtenstein
U.S. stocks were mixed Friday as investors assessed signs that
overseas factories are booming while awaiting U.S. data.
The S&P 500 ticked 0.2% higher, suggesting the broad-market
index might make a tepid recovery. The gauge dropped 0.9% Thursday
on reports that President Biden is considering higher capital-gains
taxes for the wealthiest Americans, and is on track to end a
four-week streak of gains.
The Dow Jones Industrial Average edged down 0.2%, and the Nasdaq
Composite gained 0.4%.
Stocks have been choppy this week as sentiment wavered between
concerns about fresh waves of Covid-19 infections around the world
and optimism prompted by promising economic data. Weekly jobless
claims last week hit the lowest point since the pandemic began,
indicating that the U.S. labor market is improving. Money managers
are looking to companies' projections and other key indicators to
gauge whether the economic recovery will stay on track and justify
high valuations for stocks.
"Data is taking on more meaning," said Georgina Taylor,
multiasset fund manager at Invesco. "We've had all the hope built
into expectations, but ultimately, we still need earnings to
continue recovering, at the same time as we need reassurance that
economic data is reflecting those stronger expectations."
Investors are awaiting the preliminary results from surveys in
April of U.S. purchasing managers in the manufacturing and services
industries, which will be out at 9:45 a.m. ET. Similar surveys out
earlier on Friday indicated that Europe is starting to participate
in the recovery.
"Expectations are very high for the U.S., we're entering a very
strong quarter," said Esty Dwek, head of global market strategy at
Natixis Investment Solutions. "The reopening is accelerated,
vaccinations have accelerated a lot through March and April. So
they will be a confirmation of these very strong trends in the
In premarket trading, Intel declined almost 2% after the
semiconductor company on Thursday posted a moderate drop in
revenue. The CEO said the global chip shortage could last for
another two years. Snap, developer of social-media app Snapchat,
jumped more than 5% after reporting a 66% rise in quarterly revenue
and strong user growth.
American Express slipped 4% after it said its revenue declined,
missing analysts' expectations. Personal care and paper products
maker Kimberly-Clark fell 4% after it lowered its full-year
guidance, saying that there were near-term challenges after a
quarter of supply chain disruptions and higher input costs.
In bond markets, the yield on the 10-year Treasury note ticked
down to 1.535%, from 1.554% on Thursday.
Bitcoin fell over 10% and traded below $50,000, according to
data from CoinDesk. The cryptocurrency has been dropping since last
weekend. It had risen above $63,000 and hit a record last week.
"Bitcoin is not immune to reduction in global risk appetite.
Biden's latest tax proposal that shook the equity market on
Thursday, this put a strain on investor sentiment," said Joel
Kruger, a strategist at LMAX Group, a currencies and cryptocurrency
exchange. "Short term, because it is an emerging asset that is
still trying to find its legs, it is exposed to risk-off
Overseas, the pan-continental Stoxx Europe 600 pulled back 0.7%,
weighed down by the reports of Mr. Biden's tax plans.
The Shanghai Composite Index rose 0.3% by the close of trading,
and Hong Kong's Hang Seng Index added 1.1%. Japan's Nikkei 225
ticked down 0.6%.
India's benchmark stock index declined 0.4%, shedding 2% for the
week. The country reported the world's biggest daily jump in
Covid-19 cases on Thursday.
Write to Anna Hirtenstein at firstname.lastname@example.org
(END) Dow Jones Newswires
April 23, 2021 09:50 ET (13:50 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.