U.S. oil prices advance; Russia cuts gas supply to Poland, Bulgaria
The Dow and S&P 500 finished with modest gains Wednesday, as investors sized up a mixed batch of results from Boeing Co., Microsoft Corp. and Alphabet Inc. among others, a day after the Nasdaq Composite’s lowest finish in more than two years.
How did stock indexes perform?
- The Dow Jones Industrial Average DJIA rose 61.75 points, or 0.2%, ending at 33,301.93, down from a session high of 33,697.18
- The S&P 500 SPX rose 8.76 points, or 0.2%, closing at 4,1983.96.
- The Nasdaq Composite COMP fell 1.81 points, or less than 0.1%, finishing at 12,488.93.
On Tuesday, the Dow industrials tumbled more than 800 points, or 2.4%. The S&P 500 fell 2.8%, while the Nasdaq Composite slid 4%, booking its largest daily percentage drop since Sept. 8, 2020 and its lowest close since Dec. 14, 2020, according to Dow Jones Market Data.
What drove markets?
Stocks finished mostly higher Wednesday, even as investors juggled several concerns at once, including fears the Federal Reserve could knock the economy into recession as it raises interest rates to battle high inflation, mixed U.S. corporate earnings and worries about China’s COVID outbreak, which is slowing economic growth.
Investors also were keeping watch on tensions surrounding the war in Ukraine, with signs of escalation after Russia’s Gazprom said Wednesday that it is halting gas deliveries to Bulgaria and Poland due to a failure by those countries to pay in rubles.
“The usual suspects of a slowing economy, a hawkish Federal Reserve Bank (Fed), supply chain worries, war in Europe, and now another China shutdown have all combined to make this one of the worst starts to a year ever for both stocks and bonds,” Ryan Detrick, chief market strategist at LPL Financial, wrote in emailed comments on Wednesday.
He also pointed to U.S. midterm election years that can “be rough” for stocks, down 17% on average, peak to trough. Although, “after more than a 100% rally off the March 2020 lows, some type of usual midterm year frustration was likely,” he said.
Investors also have been monitoring mixed corporate earnings. Microsoft MSFT shares rose 4.8% Wednesday after the tech giant late Tuesday reported profit and sales estimates that beat forecasts.
But Google parent Alphabet GOOGL reported sales and earnings that came in short of estimates, and shares fell 3.7%. Another big decliner was Boeing BA, with shares of the aerospace and defense giant off 7.5% after a much wider-than-expected loss and a big revenue miss.
The S&P 500’s growth sector slumped 3.7% Wednesday, while the communication services sector fell 2.6%, bucking the broader trend of a bounce for stocks.
Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said stocks appeared due for an upswing following Tuesday’s sharp selloff, adding that aggressive tones from the Fed about fighting inflation and lockdowns in China aren’t new developments.
“It just got to an extreme,” Pavlik said, by phone. “If you look at the big picture, nothing is really new.”
The U.S. trade deficit in goods jumped 17.8% in March to a record $125.3 billion, government data showed. Pending homes sales, a leading indicator of housing activity, declined in March for a fifth month in a row, according to the National Association of Realtors.
What companies were in focus?
- Tesla Inc. TSLA shares rose 0.6% Wednesday, recouping some of its 12.8% decline a day earlier that subtracted $126 billion from its market cap this week.
- General Motors Co. GM shares gained 1.6% after the auto maker reported disappointing first-quarter revenue, but gave upbeat guidance.
- Stock in Texas Instruments Inc. TXN rose 0.6% after the chip maker gave a cautious outlook over COVID-19 restrictions in China affecting manufacturing for its customers.
- Robinhood Markets Inc. HOOD fell 4.9%. The online-trading platform’s chief executive, Vlad Tenev, announced a 9% cut in the company’s work force.
- Mattel Inc. MAT shares surged 10.8% after The Wall Street Journal reported the toy maker has held informal talks with private-equity firms Apollo Global Management and L Catterton about being purchased.
How did other assets trade?
- The yield on the 10-year Treasury note BX:TMUBMUSD10Y rose 4.4 basis points to 2.817%. Yields and debt prices move opposite each other.
- Oil futures eked out a gain in volatile trade, with the U.S. benchmark CL up 0.3% to close at $102.02 a barrel.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.7%, after hitting its highest since March 2020.
- Bitcoin BTCUSD rose 2.5% to trade near $39,200.
- Gold for June delivery GC00 GCM22 fell 0.8% to settle at $1,888.70 an ounce, a two-month low.
- In European equities, the Stoxx Europe 600 XX:SXXP rose 0.7% and London’s FTSE 100 UK:UKX gained 0.5%.
- In Asia, the Shanghai Composite CN:SHCOMP rose 2.4%, while the Hang Seng Index HSI, +0.06% finished flat in Hong Kong and Japan’s Nikkei 225 JP:NIK fell 1.2%.