Tech Leads Stock Gains on Earnings; Pound Falls: Markets Wrap

(Bloomberg) -- Technology shares led gains in U.S. stocks as investors assessed a raft of corporate earnings against the backdrop of a global economic slowdown. The pound fell.

The S&P 500 Index traded above the 3,000 level, approaching its all-time high. Microsoft Corp. jumped after earnings beat expectations, while a positive outlook from Lam Research Corp. spurred a surge in chipmakers. Tesla Inc. soared after posting a surprise profit. The Dow Jones Industrial Average underperformed as 3M Co.’s results showed the downturn continued to hobble the manufacturer. Twitter Inc. tumbled on a disappointing forecast.

More on earnings:

• After the close of regular trading, Amazon.com Inc. sank as the company posted its first profit drop in more than two years. Intel Corp. rose on an upbeat forecast. Visa Inc. had to shell out more money to entice banks to issue their cards on its network.
• PayPal Holdings Inc. reported earnings that beat estimates.
• Ford Motor Co. slumped after the company cut its full-year forecast.
• EBay Inc. gave a revenue outlook that fell short of estimates.
• Xilinx Inc.’s guidance trailed expectations, in part because of the blacklist against Huawei Technologies Co.

“For the most part, the forward guidance has not been as negative as some had expected,” said Chris Gaffney, president of world markets at TIAA. “Not a stellar earnings season so far, but nothing to really scare investors about an upcoming recession.”

Investors also watched the latest developments in the ongoing trade dispute. U.S. Vice President Mike Pence criticized China’s actions against protesters in Hong Kong while calling for greater engagement between the world’s two biggest economies. The Asian nation aims to buy at least $20 billion of agricultural products in a year if it signs a partial trade deal, people familiar with the matter said.

Elsewhere, U.K. Prime Minister Boris Johnson’s bid for a snap election on Dec. 12 was up in the air after his opponents said they want to rule out a no-deal Brexit first. The pound held losses. The European Central Bank kept monetary stimulus unchanged in the final meeting of Mario Draghi’s presidency.

Read: With Record in Grasp, Tech Has Become S&P 500’s Biggest Problem

With the earnings season, investors are getting numerous chances to see how corporations are withstanding the effects of trade tension, slowing growth and Brexit. Two key measures of U.S. business investment posted declines that were worse than analysts expected in September. Other data indicated consumers are still healthy enough to keep spending and driving growth.

“There is some nervousness that is good enough to avoid any signs within the broad market of irrational exuberance or animal spirits,” said John Stoltzfus, the chief investment strategist at Oppenheimer & Co. “Overall, the story is reflecting a watch-and-wait kind of scenario as investors and traders really absorb the news coming across on earnings.”

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.2% to 3,010.29 as of 4 p.m. New York time.
• The Dow Jones Industrial Average declined 0.1%.
• The Nasdaq Composite Index jumped 0.8%.
• The Stoxx Europe 600 Index increased 0.6.
• The MSCI Asia Pacific Index advanced 0.4%.

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%.
• The euro decreased 0.2% to $1.1103.
• The British pound dipped 0.5% to $1.2845.
• The Japanese yen was little changed at 108.64 per dollar.

Bonds

• The yield on 10-year Treasuries slid less than one basis point to 1.76%.
• Germany’s 10-year yield fell one basis point to -0.40%.
• Britain’s 10-year yield declined six basis points to 0.625%.

Commodities

• The Bloomberg Commodity Index increased 0.4%.
• West Texas Intermediate crude rose to $56.23 a barrel.
• Gold advanced 0.6% to $$1,504.70 an ounce.

--With assistance from Adam Haigh, Vassilis Karamanis, Yakob Peterseil and Samuel Potter.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth

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