Stocks Drop a Second Day With  Spending in Focus: Markets Wrap
Pedestrians are reflected in an electronic stock board displaying a graph of the Nikkei 225 Stock Average’s movements during the day outside a securities firm in Tokyo, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

Stocks Drop a Second Day With Spending in Focus: Markets Wrap

Stocks fell for a second day and Treasury yields touched a 14-month high as traders weighed the consequences of more stimulus from the Biden administration.

The utilities, information technology and consumer staples sectors pushed the benchmark S&P 500 lower, though financial shares recovered from Monday’s slide in the wake of the implosion of Archegos Capital Management. Apple Inc. led the Nasdaq Composite into negative territory. The dollar strengthened for a second day and gold slipped below $1,700 per troy ounce. Oil halted a two-day rally before the April 1 meeting of OPEC and its allies.

“The market’s still trying to figure out what the trade is -- by that I mean, the stay-at-home stocks were the trade for basically a year,” said JJ Kinahan, chief market strategist at TD Ameritrade. “Now, more people are getting vaccinated, but at the same time, you’re starting to see a rise in cases in many states. So just like that is messy, so is the market.”

President Joe Biden, in an address slated for Wednesday in Pittsburgh, will detail a mass expansion of government spending aimed at reducing inequality and strengthening infrastructure. A revamp of the tax code is also part of the plan and is already proving divisive among economists and lawmakers.

Stocks Drop a Second Day With  Spending in Focus: Markets Wrap

Ten-year Treasury yields increased to as high as 1.77%. The five-year rate rose as high as 0.95%, a 13-month high, followed by a block sale in the notes.

ViacomCBS and Discovery rose, while the American Depositary Receipts of Chinese companies linked to the Archegos block trades also posted gains.

Europe’s equity benchmark rose to its highest level in 13 months as the momentum swung in favor of cyclical stocks such as banks and automakers.

Meanwhile, the U.S. reached a record three-day stretch of 10 million shots over the weekend, according to the Bloomberg Vaccine Tracker, and plans to offer inoculations to 90% of adults.

Stocks Drop a Second Day With  Spending in Focus: Markets Wrap

Some key events to watch this week:

  • President Biden is expected to unveil his infrastructure program Wednesday.
  • EIA crude inventory report Wednesday.
  • OPEC+ meets to discuss production levels for May on Thursday.
  • China Caixin PMI due Thursday.
  • U.S. employment report for March on Friday.
  • Good Friday starts the Easter weekend in countries including the U.S., U.K., France, Germany, Australia and Canada.

These are some of the main moves in financial markets:

Stocks

  • The S&P 500 Index dipped 0.3% to 3,958.86 as of 4:02 p.m. New York time.
  • The Dow Jones Industrial Average fell 0.3% to 33,070.94, the biggest fall in a week.
  • The Nasdaq Composite Index fell 0.1% to 13,045.40.
  • The Nasdaq 100 Index declined 0.5% to 12,896.54.
  • The Stoxx Europe 600 Index jumped 0.7% to 430.65, the highest in more than 13 months.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.3% to 1,154.34, the highest in almost 20 weeks on the biggest advance in a week.
  • The euro dipped 0.4% to $1.172, the weakest in 21 weeks.
  • The British pound fell 0.3% to $1.3724.
  • The Japanese yen depreciated 0.5% to 110.34 per dollar, hitting the weakest in about a year with its fifth straight decline and the largest decrease in more than three weeks.

Bonds

  • The yield on two-year Treasuries rose less than one basis point to 0.14%.
  • The yield on 10-year Treasuries climbed less than one basis point to 1.71%, the highest in more than a week.
  • The yield on 30-year Treasuries fell three basis points to 2.37%, the biggest fall in a week.
  • Britain’s 10-year yield climbed four basis points to 0.824%, the highest in more than a week on the largest increase in more than a week.
  • Germany’s 10-year yield increased three basis points to -0.29%, the highest in more than a week.

Commodities

  • West Texas Intermediate crude decreased 1.9% to $60.38 a barrel.
  • Gold depreciated 1.7% to $1,682.95 an ounce, the weakest in more than 11 months on the biggest tumble in more than a month.

©2021 Bloomberg L.P.

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