Stocks Rise Amid Disparate Earnings; Bonds Retreat: Markets Wrap

(Bloomberg) --

Most U.S. stocks rose as a group of high-profile earnings offered divergent clues on the strength of the American economy. The 10-year Treasury yield reached its highest level since the March Federal Reserve meeting.

The S&P 500 eked out a gain, while the Nasdaq 100 closed within 0.1 percent of an all-time high. Apple Inc. was flat and Qualcomm Inc. surged after the two dropped litigation against each other. Netflix Inc. ended the regular session higher, but slid in late trading after a key metric missed estimates. IBM Corp. fell afterhours as sales fell short of forecasts.

Financial firms paced gains after BlackRock Inc.’s results offset weakness at Bank of America Corp. UnitedHealth Group Inc.’s earnings call rekindled concern about policy uncertainty, dragging insurers lower. Johnson & Johnson advanced after strong earnings.

Treasuries continued to slump, with rates reclaiming levels last seen before the Fed’s dovish tilt a month ago. In Europe, equities climbed for a fifth day, driven by insurance and financial services firms. In Asia, shares in China and Hong Kong outperformed markets in Japan and South Korea. The euro pared a decline after Bloomberg reported that European Central Bank officials are said to lack enthusiasm for any revamp of their negative-interest rate tool.

“You’re seeing some fairly significant companies -- last Friday, JPMorgan, a few others here this week, BlackRock today -- a lot of these financials that had gotten pummeled this quarter seem to be doing pretty well in beating earnings.” said Wayne Wicker, CIO at Vantagepoint Investment Advisers, which has about $28 billion in assets under management as of the end of March. “It’s starting to give investors a little encouragement that maybe we have not breached the lower end of expectations.”

Investors are spending the holiday-shortened week assessing the chances that stocks will sustain their rally even as similar gains in global investment-grade bonds have ebbed since late March. Optimism over earnings appears to be boosting bullish sentiment in equities, though volumes have been muted.

Central banks are also in the frame, with Chicago Fed President Charles Evans, who currently sees rates on hold until the fall of 2020, saying that the nation’s central bank may need to cut them if inflation falls. Officials from Australia, New Zealand and Japan also indicated appetite to support growth through monetary policy.

Elsewhere, oil held near the lowest in a week in New York on estimates that U.S. crude inventories increased again. Emerging-market stocks climbed, though the currencies weakened.

Here are some notable events coming up:

• Earnings season rolls on this week, with reports due from: Morgan Stanley, American Express, Netflix, IBM, United Continental, PepsiCo, Honeywell, Alcoa and Taiwan Semiconductor.
• Wednesday brings China GDP, industrial production and retail sales data.
• Stock markets will be closed for the Good Friday holiday in countries including the U.S., U.K. and Germany.

These are the main moves in markets:

Stocks

• The S&P 500 rose 0.1 percent to 2,907.09 as of 4 p.m. in New York.
• The Dow was up 0.3 percent and the Nasdaq 100 Index climbed 0.3 percent.
• The Stoxx Europe 600 Index increased 0.3 percent.
• The MSCI Emerging Market Index rose 0.7 percent, the largest advance in two weeks.
• The MSCI Asia Pacific Index climbed 0.3 percent to the highest in more than six months.

Currencies

• The Bloomberg Dollar Spot Index increased 0.2 percent to the highest in more than a week.
• The euro was little changed at $1.1290.
• The British pound declined 0.3 percent to $1.3059.
• The Japanese yen climbed 0.1 percent to 111.97 per dollar.

Bonds

• The yield on 10-year Treasuries increased three basis points to 2.59 percent, the highest in four weeks.
• Germany’s 10-year yield climbed one basis point to 0.066 percent, the highest in almost four weeks.

Commodities

• West Texas Intermediate crude climbed 1.1 percent to $64.11 a barrel.
• Gold futures fell 0.9 percent to $1,279.20 an ounce.

--With assistance from Sarah Ponczek, Andreea Papuc and Yakob Peterseil.

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Todd White

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