Stocks slip on Wall Street as market eases back from recordsWednesday, April 07, 2021
A wobbly day of trading on Wall Street left stocks slightly lower yesterday, pulling the market back from the all-time highs it reached a day earlier.
The S&P 500 snapped a three-day winning streak, slipping 0.1 per cent after wavering between small gains and losses much of the afternoon. Stocks within the benchmark index were nearly evenly split between gainers and losers. Technology and health care stocks accounted for much of the decline.
Financial stocks fell as bond yields eased. That countered broader gains from companies that are depending on continued economic growth to recover. Oil prices rose.
Much of the gyrations within the market lately are occurring as Wall Street assesses the health and speed of the economic recovery.
There's been strong support for many of the sectors and companies beaten down by the pandemic as vaccine distribution helps businesses reopen, while government stimulus helps shore up businesses in the interim. Even as that shift occurs, technology and other stocks that benefitted from the shutdowns still look fundamentally strong, said Jeff Buchbinder, equity strategist at LPL Financial.
“We're seeing this battle play out here in markets every day,” he said. “That's going to drive some churn.”
The S&P 500 lost 3.97 points to 4,073.94. The Dow Jones Industrial Average fell 96.95 points, or 0.3 per cent, to 33,430.24. Both indexes set all-time highs Monday. The tech-heavy Nasdaq composite slipped 7.21 points, or 0.1 per cent to 13,698.38.
Small company stocks, which have been outgaining the broader market this year, also fell. The Russell 2000 index of smaller companies gave up 5.73 points, or 0.3 per cent, to 2,259.15. The index is up 14.4 per cent so far this year, while the S&P 500, which tracks large companies, is up 8.5 per cent.
Bond yields fell. The yield on the 10-year Treasury slipped to 1.65 per cent from 1.72 per cent late Monday. That helped pull banks lower, as they rely on higher yields to charge more lucrative interest on loans. JPMorgan Chase fell 0.7 per cent.
Investors have been weighing concerns about higher inflation as the economy grows, along with expectations that retailers and other service sector stocks will make solid gains as the world moves past the pandemic and returns to some semblance of normalcy.
Retailers, cruise lines and hotel operators were among the winners yesterday. Gap rose 2.5 per cent, Norwegian Cruise Line added 4.6 per cent, and Wynn Resorts gained four per cent. Alaska Air Group climbed 3.7 per cent, while Delta Air Lines closed 2.8 per cent higher.
The International Monetary Fund (IMF) expects global economic growth to accelerate this year as vaccine distribution ramps up and the world rebounds. The 190-country lending agency said it expects the world economy to expand six per cent in 2021, up from the 5.5 per cent it had forecast in January. That would be the fastest expansion in IMF records dating back to 1980.
The Labor Department in the US reported that job openings reached the highest level on record in February, a harbinger of healthy hiring and a hopeful sign for those looking for work. That upbeat report follows encouraging reports over the last week on job growth and improvements in the services sector, which is one of the hardest hit areas of the economy from the pandemic.
Swiss bank Credit Suisse said it expects a US$4.7-billion loss related to a default of by a US hedge fund. Two top executives are leaving the bank. Credit Suisse also suspended a stock buy-back programme and cut its dividend. The bank's US-listed shares, which already fell sharply last week after initial news of the default came out, rose 0.9 per cent yesterday.
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