(Bloomberg) -- The biggest U.S. technology shares slumped, weighing on major equity gauges as consumer confidence crashed and more companies withdrew earnings guidance. The dollar weakened.
The Nasdaq Composite snapped a two-day winning streak, pulled down by Facebook, Amazon.com and Netflix as data showed U.S. consumer confidence dropped in April to the lowest since 2014. Most stocks in the S&P 500 Index rose amid gains for casino operators, cruise lines and other coronavirus-sensitive shares, pushing up a version of the index that strips out market- biases by more than 1%.
“It seems like a rotation is underway,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. ““The question is whether this is a durable shift or a counter-trend move.”
The Stoxx Europe 600 climbed to a seven-week high as several major economies moved toward loosening restrictions. Oil futures in New York slumped to about $10 a barrel before paring losses in a volatile session. Treasuries edged higher.
With U.S. equities up more than 25% since the lows of March, investors are in search of new catalysts to drive further gains. This week has policy decisions due from the Federal Reserve and European Central Bank as well as earnings still to come from some of the world’s biggest companies, among them Amazon.com Inc., Microsoft Corp. and Samsung Electronics Co. At the same time, traders are monitoring coronavirus infection rates and the ongoing discussions of how to restart activity.
“Nobody expects us to go back to where we left off, but at least there are steps to opening back up,” said Chris Gaffney, president of world markets at TIAA. “We’re going to continue to see volatility.”
China’s top scientists said the novel coronavirus will not be eradicated, joining a growing consensus that the pathogen will likely return in waves. Spain said it aimed to lift its lockdown within eight weeks as Europe moves to loosen restrictions. The Trump administration issued a strategy to expand U.S. testing, including partnering with retail chains.
On the earnings front, Alphabet Inc. reported better-than-estimated sales after the close of trading Tuesday. Caterpillar Inc. and PepsiCo Inc. joined companies shelving earnings forecasts for the rest of the year. Merck & Co. reported profit that beat estimates, while UBS Group AG gained after earnings rose.
Elsewhere, it was a choppy session in Asia, where South Korean and Hong Kong equities climbed, shares in Japan finished slightly higher and those in Australia edged down.
These are the main moves in markets:
Stocks
- The S&P 500 Index fell 0.5% at the close of trading in New York; the Nasdaq Composite fell 1.4%.
- The Stoxx Europe 600 Index rose 1.7%.
- The MSCI Asia Pacific Index climbed 0.5%.
- The MSCI All-Country World Index rose 0.2%.
Currencies
- The Bloomberg Dollar Spot Index sank 0.3%.
- The euro was little changed at $1.0833.
- The British pound was little changed at $1.243.
- The Japanese yen strengthened 0.4% to 106.87 per dollar.
Bonds
- The yield on 10-year Treasuries dipped five basis points to 0.61%.
- Germany’s 10-year yield decreased one basis point to -0.47%.
- Britain’s 10-year yield fell one basis point to 0.28%.
Commodities
- West Texas Intermediate crude fell 0.7% to $12.69 a barrel.
- Copper fell 0.1% to $2.343 per pound.
- Gold weakened 0.4% to $1,707.43 an ounce.
©2020 Bloomberg L.P.
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