Tech Stocks Rally, Industrials Slump on Earnings: Markets Wrap

(Bloomberg) --

Major U.S. stock gauges closed mixed as earnings reports sparked a rally in big technology companies and sent industrial shares lower. The dollar extended gains to a four-month high.

While the tech-heavy Nasdaq 100 reached a record following strong results from Microsoft and Facebook, the broader S&P 500 Index ended little changed after 3M cut its earnings forecast and UPS reported a profit drop. The Stoxx Europe 600 slipped as two major European mergers appeared to founder. Treasuries dipped after solid U.S. durable-goods data.

Investors are looking to company earnings to breathe new life into the global rally that lifted the U.S. benchmark to a record high this week and helped bring the longest run of gains in more than a year for European stocks. Mostly positive results so far this earnings season have gone some way toward mitigating concerns over the global economy, and U.S. first-quarter gross domestic product data due Friday should offer more guidance.

“We’re in an obviously relatively slower growth economic environment and earnings expectations have drifted lower,” said Ryan Primmer, head of investment solutions at UBS Asset Management. “I would call it a good-enough earnings season for the market to be rewarded for where it’s at today.”

In corporate news, merger talks ended between German lenders Deutsche Bank and Commerzbank, while U.K. grocer Sainsbury’s plan to take over Walmart’s Asda was blocked by antitrust authorities.

Argentina’s currency dropped to a record low after suffering a deep sell-off Wednesday. The euro traded at the lowest since 2017. Sweden’s krona dropped as the Riksbank said rates will stay low for longer. Turkey’s lira tumbled to its weakest since October after the central bank dropped a commitment to tighten policy if needed.

Elsewhere, South Korea’s won slumped after the country’s economy unexpectedly contracted in the first quarter. Asian shares were mostly lower, with sharp declines in China. Brent crude touched $75 for the first time since October. Emerging-market currencies and shares fell.

Here are some notable events coming up this week:

• The initial print on first-quarter U.S. GDP Friday will be closely watched for clues as to how the economy responded to the government shutdown and fallout from the fourth-quarter market rout.

These are the main market moves:

Stocks

• The S&P 500 Index was little changed at the close of trading in New York.
• The Stoxx Europe 600 Index declined 0.2 percent.
• The MSCI Asia Pacific Index fell 0.3 percent.
• The MSCI Emerging Market Index decreased 0.7 percent.

Currencies

• The Bloomberg Dollar Spot Index rose 0.1 percent.
• The euro dipped 0.2 percent to $1.1132.
• The Japanese yen gained 0.5 percent to 111.67 per dollar.
• The MSCI Emerging Markets Currency Index sank 0.3 percent.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.53 percent.
• Germany’s 10-year yield was little changed at -0.01 percent.
• Britain’s 10-year yield dipped two basis points to 1.15 percent.

Commodities

• The Bloomberg Commodity Index slipped 0.3 percent.
• West Texas Intermediate crude fell 1.4 percent to $65 a barrel.
• Copper fell 1.7 percent to $2.868 a pound.
• Gold rose 0.2 percent to $1,277.66 an ounce.

--With assistance from Cormac Mullen, Eddie van der Walt and Sophie Caronello.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Samuel Potter at spotter33@bloomberg.net, Brendan Walsh

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