Stocks Close Higher as Growth Debated; Bonds Rise: Markets Wrap

By Sarah Ponczek,Janine Wolf / April 26, 2018 / www.bloomberg.com / Article Link

Benchmark Treasury 10-year yields extend retreat from 3%

Dollar touches another three-month high before pulling back

U.S. Economy Expanded at 2.3% Pace in First Quarter

Most U.S. stocks edged higher as the debate continued over whether better-than-forecast corporate earnings are enough to offset signs the economy may be cooling. Yields on benchmark Treasuries declined for a second day after reaching a more than four-year high.

“Signs of slowing global economic growth, rising interest rates, higher commodity prices and lingering trade uncertainty are all fueling concern profit margins may be peaking,” Alec Young, managing director of global markets research at FTSE Russell, said in an email.

After reporting strong results, tech giants including Microsoft, Intel and Amazon.com had a tough time holding on to all their gains. At its high of the day, the S&P 500 Information Technology Sector was up 1 percent, but by midday it dropped into the red before closing slightly higher. It’s a pattern that’s plagued this earnings season: Even though companies are beating earnings predictions at the fastest rate ever, stocks have remained relatively flat since JPMorgan kicked off reports.

The slew of first quarter growth figures are the latest clues on the health of the global economy, which is preoccupying investors amid growing signs of a peak in the cycle and against a backdrop of rising rates. The murky outlook is threatening to outweigh the impact of both a solid earnings season and easing geopolitical tension.

Yields on 10-year Treasuries dropped and the dollar declined from recent highs as the American economy slowed less-than-expected in the first quarter. The U.K. posted the worst quarterly GDP figures since 2012 and lackluster numbers also came out of France and Spain.

“Interest rates, the 10-year, is the biggest issue that kind of hangs over the market,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group LLC in Pittsburgh. “It can bring the party to an end -- and by party, I mean the actual economic activity on Main Street that is driving Wall Street right now.”

Bloomberg’s Mike McKee reports on the U.S. first-quarter GDP numbers showing a slow down in the economy.

Source: (Bloomberg)

Elsewhere, crude oil held above the $68-a-barrel level as a geopolitical risk premium in the market limited losses. Prices have been supported by investors waiting to see whether the nuclear accord that Iran signed with world powers in 2015 will remain.

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And these are the main moves in markets:

Stocks

The S&P 500 Index rose 0.1 percent to 2,669.96 as of 4:03 p.m. New York time, while the Dow Jones Industrial Average dropped less than 0.1 percent to 24,311.32 and the Nasdaq Composite Index increased less than 0.1 percent to 7,119.80.

The Stoxx Europe 600 Index rose 0.2 percent and the MSCI Asia Pacific Index gained 0.9 percent.

The U.K.’s FTSE 100 Index gained 1.1 percent, the most in more than a week.

The MSCI Emerging Market Index rose 1.2 percent.