A trader speaks on the telephone while working on the floor of the Philippine Stock Exchange.(Photographer: Taylor Weidman/Bloomberg)

Tech Snaps 3-Day Skid But Stocks Can't Hold Gains: Markets Wrap

(Bloomberg) -- Technology stocks rebounded from a three-day rout but failed to lead the broader market higher, while yields on Treasuries retreated from a seven-year peak amid rising trade tensions and a sketchy outlook for global growth. The dollar drifted lower and crude hovered around $75 a barrel.

The Nasdaq 100 Index, which lost nearly 4 percent over the previous three sessions, rose despite giving up much of a 1 percent increase earlier in the day. The S&P 500 Index turned lower on a 3.4 percent decline in materials shares, the worst performing group in the stock market, after a leading coatings maker warned that profits would fall short of analyst forecasts.

Tech Snaps 3-Day Skid But Stocks Can't Hold Gains: Markets Wrap

“Tech’s slide -- outside semiconductors -- has stopped due to the pause in interest rates moving higher,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “Separately from that, people are stepping in and buying some of these names because they’re on sale.”

Meanwhile, the yield on benchmark 10-year Treasuries slipped after almost hitting 3.26 percent, the highest since 2011.

“There was some talk that when the bond market opened up today we may see rates move lower. That was a telling sign, and we did not see that,” said Victoria Fernandez, chief market strategist for Crossmark Global Investments. “We have really established this new range on the 10-year.”

The Stoxx Europe 600 Index rose for the first time in four days. The MSCI Asia Pacific Index notched a seventh straight drop, though stocks in Shanghai rose following the biggest selloff in more than three months. The yuan gained in onshore trading after sliding a day earlier -- a move that prompted concern from the U.S. government.

With a gloomy mood permeating markets, the latest report from the International Monetary Fund did little to spur investor confidence. The IMF cut its global growth outlook for the first time since 2016, in part because of rising trade tensions between the world’s two largest economies. China took steps to aid lending this week, a move that inevitably puts pressure on the yuan and potentially creates a vicious circle where the currency’s weakness threatens to further aggravate the situation by prompting more easing by Chinese officials.

“If the trade confrontation continues, the Chinese currency will go lower and that will create a whole host of problems for the global economy,” said Alicia Levine, chief strategist at BNY Investment Management.

Meanwhile, Chinese Internet giant Tencent Holdings Ltd. continued to plunge, falling 38 percent, or $220 billion, from its January high. It has lost more market value than any other company in the world this year.

South Korea’s market was closed for a holiday. Next up, traders are bracing themselves for $230 billion of Treasury auctions this week.

Terminal users can read more in our Markets Live blog.

Here are some key events coming up:

  • The U.S. Treasury has $230 billion worth of debt auctions this week.
  • The IMF and World Bank will hold meetings in Bali from Friday, where finance chiefs from around the world will gather.
  • A closely watched gauge of U.S. consumer prices probably remained elevated in September and rose 2.3 percent from a year earlier, according to forecasts ahead of Thursday’s release.
  • JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off earnings season for U.S. banks on Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 declined 0.1 percent to 2,880.34, while the Nasdaq 100 increased 0.3 percent.
  • The Stoxx Europe 600 Index rose 0.2 percent.
  • The U.K.’s FTSE 100 Index gained 0.5 percent.
  • The MSCI Asia Pacific Index sank 0.8 percent, hitting the lowest since July 2017 with its seventh consecutive decline.
  • The MSCI Emerging Market Index added 0.1 percent, rebounding from a loss of almost 0.5 percent earlier in the day.

Currencies

  • The Bloomberg Dollar Spot Index declined less than 0.1 percent.
  • The euro was little changed at $1.1494.
  • The British pound added 0.4 percent to $1.314.
  • The Japanese yen gained 0.3 percent to 112.93 per dollar.

Bonds

  • The yield on 10-year Treasuries fell three basis points to 3.2025 percent.
  • Germany’s 10-year yield climbed two basis points to 0.547 percent.
  • Britain’s 10-year yield increased four basis points to 1.716 percent.

Commodities

  • The Bloomberg Commodity Index rose 0.4 percent.
  • West Texas Intermediate crude added 0.8 percent to $74.85 a barrel.
  • Gold gained 0.2 percent to $1,189.95 an ounce.

©2018 Bloomberg L.P.