News: US stocks close near session lows
Stocks closed near Monday’s (3 May) lows as giants Tesla Inc and Amazon.com Inc weighed on the Nasdaq Composite Index which lost 0.48% to 13,895.12. Traders also parsed economic data, with inflation remaining at the forefront of the investment debate. The dollar dropped, while Treasuries rose.
Tech and retail companies in the S&P 500 Index fell, while commodity and industrial shares gained. The benchmark finished 0.27% higher at 4,192.66. The Dow Jones Industrial Average advanced 0.70% to 34,113.23.
Pfizer Inc climbed as the Biden administration will support its move to begin exporting US-made doses of the coronavirus vaccine, while Moderna Inc rallied after agreeing to provide as many as 500m doses of its shot to the global programme Covax. The Estee Lauder Companies Inc sank as the cosmetics giant’s sales missed estimates.
A report Monday showed that growth at US manufacturers cooled in April, while a gauge of prices paid for materials jumped to the highest since 2008. Federal Reserve Chairman Jerome Powell said the economic recovery is “making real progress”, but the gains have been uneven following a downturn that cut hard along lines of race and income. New York Fed President John Williams noted that current conditions are “not nearly enough” for a shift in the monetary policy stance.
Markets have been obsessed over whether higher inflation is coming. Faced with rising prices for everything from lumber to oil and computer chips, chief executive officers have cut costs and boosted prices for their products. The strategy appears to be working, with first quarter income from S&P 500 companies jumping five times as fast as sales, according to data compiled by Bloomberg Intelligence.
Ignoring the adage “sell in May and go away” may reward stock investors in 2021, according to a financial firm. The firm cited the S&P 500’s track record during the past decade in a blog post. In eight of those years, the gauge posted gains for the six months ended in October. Last year’s rally was 12%, the biggest since 2009, when a bull market was just getting started. The benchmark produced an average advance of 3.8% for all 10 years, beating a 1.7% average since 1950. – Bloomberg News.
Europe equities rose on Monday (3 May), as investors weighed robust earnings reports and a brightening economic outlook against the risks of rising inflation, supply disruptions, and higher taxes. The UK market was closed for a public holiday.
The Stoxx Europe 600 Index climbed 0.58% to 439.92, moving closer to historic highs reached last month. Carmakers led advances, despite continuing warnings about production disruptions due to a shortage of chips. Ferrari NV gained 2.6% amid upbeat estimates for its earnings report due Tuesday.
Renewables underperformed after a financial firm said that Siemens Gamesa Renewable Energy SA’s 2021 guidance was disappointing. Vestas Wind Systems A/S was among the biggest drags on the Stoxx 600 Index, dropping 4.3%.
The Stoxx 600 Index has climbed more than 10% this year, buoyed by expectations of rapid economic recovery, as vaccinations against the coronavirus progress while fiscal and monetary policy across the region remains loose. While much of the positive news is already priced into lofty valuations, European companies are delivering one of the best earnings seasons on record, supporting the gauge.
Hermes International rose, trading near all-time highs, as investors continue betting on luxury winners in a sector that is powering ahead in spite of COVID-19. Insurance also rose, with Allianz SE gaining 1.6%.
A gauge of manufacturing activity in the Euro Area rose to 62.9 in April, the highest reading in the survey’s 24-year history. The violent rebound has caused supply shortages and a surge in prices, with companies surveyed reporting unprecedented delays in securing raw materials and higher costs for chemicals, metals, and plastics. – Bloomberg News.
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