U.S. Stocks Poised to End Three-Day Selloff
By Anna Hirtenstein and Xie Yu
U.S. stocks rose Thursday, putting major indexes on track to end
a three-day losing streak.
The Dow Jones Industrial Average rose 102 points, or 0.3%, to
33689 shortly after the opening bell, chipping away at gains after
logging its steepest three-day decline since late October. The
S&P 500 gained 0.7%, and the Nasdaq Composite jumped 1.2%.
Investors have been jittery this week: consumer prices surged
higher in April, prompting concerns that the Federal Reserve may
move on interest rates or scale back bond purchases sooner than
expected. But central bank officials have repeatedly said that they
expect any jump in inflation to be transitory. A Fed policy maker
on Wednesday said more data would be necessary for the central bank
to begin scaling back its easy-money policies.
The latest weekly jobless claims data, a proxy for layoffs,
showed that 473,000 people applied for unemployment benefits last
week. Economists surveyed by The Wall Street Journal had forecast
500,000 new filings. Claims have come down from a recent January
peak of about 900,000, though they still remain substantially
higher than levels seen before the pandemic struck last spring.
Technology stocks appeared poised to lead the rebound on
Thursday, after taking a beating in recent days as investors opted
for less richly valued companies. Facebook rose 1.6%, while
Amazon.com added 1.2%.
"Market selloffs are a good time for people to buy into tech:
for many investors, it's an opportunity to buy something that's
been expensive and get a bit of a discount," said Salman Baig, a
multiasset investment manager at Unigestion. "People are looking
for a place to ride out the storm."
Still, some money managers remained wary. The jump in consumer
prices has triggered debates about whether "inflation is actually
more of an issue than we were led to believe, and whether the
Federal Reserve is going to have to be a little bit more
aggressive," said Dwyfor Evans, head of macro strategy for the
Asia-Pacific region at State Street Global Markets.
The market for U.S. Treasurys stabilized after four consecutive
days of selloffs. The yield on the 10-year Treasury note ticked
down to 1.685%, from 1.693% on Wednesday, its highest level in more
than a month. Yields fall when prices rise.
Earnings season is set to continue, with Airbnb, Walt Disney,
Coinbase and DoorDash expected to post results after markets
Bitcoin dropped over 8% to around $49,800, according to
CoinDesk, after Tesla Chief Executive Elon Musk said his company
had suspended accepting the cryptocurrency as payment for vehicles
due to its high carbon footprint. It earlier fell as low as
$46,294.72, its lowest price since March 1, according to
Commodity markets were broadly lower. U.S. crude oil slipped
2.5% to $64.44 after the owner of the Colonial Pipeline said
Wednesday that it had begun restarting operations following a
cyberattack that shut down the main fuel conduit serving the East
Overseas, the pan-continental Stoxx Europe 600 fell 0.4%.
Among European equities, Burberry fell nearly 8% after reporting
a decline in full-year revenue and a measure of profit. Retail
trading platform Hargreaves Lansdown slid more than 5% after it
said it has started to see a fall in share-dealing volumes as
lockdown measures eased.
Investors continued to sell European government bonds. The yield
on the benchmark 10-year German bund climbed to minus 0.110%,
trading around the highest level since May 2019.
In Asia, most major equity benchmarks declined by the close of
trading. Hong Kong's Hang Seng Index lost 1.8%. Indexes in South
Korea, Japan, Australia and China also all retreated. Taiwan's
benchmark Taiex shed 1.5%, declining for a fourth straight day.
That put it in correction territory, meaning it has fallen at least
10% from a recent high.
In Tokyo, shares in SoftBank Group plunged by more than 7%, even
after the technology investor reported the highest-ever annual
profit for a Japanese company. In a note to clients, Jefferies
analyst Atul Goyal said the lack of a new buyback plan was
disappointing, after SoftBank concluded an earlier program totaling
-- Akane Otani contributed to this article
Write to Xie Yu at email@example.com
(END) Dow Jones Newswires
May 13, 2021 10:02 ET (14:02 GMT)
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