(Bloomberg) — U.S. stocks drifted as traders weighed disappointing earnings and bond-market gyrations sparked by concerns over inflation and monetary tightening.
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The S&P 500 swung between gains and losses after opening lower in wake of underwhelming results from Amazon.com Inc. and Apple Inc. The benchmark index is on pace for its biggest monthly increase since last November. Meanwhile, the Dow Jones Industrial Average turned positive, led higher by Microsoft Corp. and Visa Inc. Meta Platforms Inc. also gained after announcing its name change from Facebook Inc.
“It looks like investors already have a bit of a sugar high as Halloween approaches,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors. “Most of us were prepared for a bumpy ride today following yesterday’s announcements from Apple and Amazon. Fortunately, today’s positive reports from companies like Exxon and Chevron helped change the narrative.”
Yields on shorter-maturity Treasuries rose more than long-dated issues. Inflation pressures and the prospect of interest-rate hikes are whipsawing bond markets. The U.S. dollar strengthened the most since June and crude oil gained.
The Stoxx Europe 600 Index erased losses, but still secured its fourth straight weekly advance.
European bonds extended Thursday’s retreat as data on Eurozone economic growth and inflation topped analysts’ estimates, reinforcing growing conviction that interest-rate increases are on the horizon after the European Central Bank president only offer a mild pushback against traders’ bets on a hike as soon as October next year.
Markets are grappling with a number of crosscurrents. Generally positive corporate performance has helped to underpin global equities. But inflation risks from supply-chain snarls and costlier raw materials are boosting expectations for rate hikes and dimming the economic outlook.
“Almost any data series you look at, be it the bond market, be it inflation, GDP, the labor market, anything is still showing these signs of fibrillation and that’s going to take some time to sort out,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman, on Bloomberg Radio and TV’s “Surveillance.”
The latest data showed U.S. growth slowed more than expected in the third quarter, hampered by supply chains and a surge in Covid-19 cases. A separate report showed that weekly jobless claims fell to a pandemic low, and personal spending slowed in line with analysts’ estimates in September.
In cryptocurrencies, Bitcoin rose to $62,400 and Ether rallied to a record high.
For more market analysis, read our MLIV blog.
These are the main moves in markets:
The S&P 500 was little changed as of 1:52 p.m. New York time
The Nasdaq 100 was little changed
The Dow Jones Industrial Average rose 0.1%
The MSCI World index fell 0.3%
The Bloomberg Dollar Spot Index rose 0.7%
The euro fell 1.1% to $1.1554
The British pound fell 0.8% to $1.3685
The Japanese yen fell 0.4% to 113.99 per dollar
The yield on 10-year Treasuries declined two basis points to 1.56%
Germany’s 10-year yield advanced three basis points to -0.11%
Britain’s 10-year yield advanced three basis points to 1.03%
West Texas Intermediate crude rose 0.8% to $83.48 a barrel
Gold futures fell 1.1% to $1,783 an ounce
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