U.S. Stocks Regain Some Ground
27 March 2019 - 5:38AM
Dow Jones News
By David Hodari and Corrie Driebusch
The Dow Jones Industrial Average pared gains Tuesday afternoon
after earlier rising as much as 279 points, though the smaller rise
still marked a bounceback from sharp losses late last week.
The blue-chip index was up 85 points, or 0.3%, in recent
trading, but it remains more than 1% below its level a week
prior.
"The moves last week caught us off-guard in terms of the
market's newfound sensitivity to the global economic slowdown
theme," said John Brady, managing director at futures brokerage
R.J. O'Brien & Associates. He said he remains cautiously
confident in U.S. stocks, however.
"The United States is not an island; it will slow as the global
economy slows. But I think we have a buffer," he said.
Technology, financial and energy stocks were driving U.S.
stocks' gains on Tuesday, buoying the S&P 500 and Nasdaq
Composite 0.5% higher.
Apple shares rose 0.6% after announcing a raft of products aimed
at boosting its services revenue, including new TV and news
products on Monday. Dow Jones & Co., publisher of The Wall
Street Journal, has a commercial agreement to supply news services
to Apple.
Banking stocks also outperformed in early trading after taking a
beating late last week, with Goldman Sachs rising 0.5% and JPMorgan
Chase up 0.4%. Goldman's collaboration with Apple on its new credit
card adds to the recent pressure on financial-sector stocks amid
ebbing market expectations of aggressive monetary policy from
central banks.
Shares in energy companies helped lift the Dow industrials
higher, with Exxon rising 0.9% and Chevron gaining 0.7%, as oil
prices continued to rise following a difficult end to 2018. U.S.
crude-oil futures rose 1.9% to $59.94 a barrel in recent trading,
putting its year-to-date gains at more than 30%.
Investors' and strategists' recent jitters over the prospects
for global growth relating to a raft of downbeat economic data have
prompted a softening in central-bank rhetoric in recent weeks, a
move that has stung bank stocks.
The yield on 10-year U.S. Treasurys was 2.434%, up from 2.418%
late Monday and on course to snap a four-day negative streak. A
recent slip in 10-year U.S. Treasury yields below the level of
three-month Treasury bills has been seen by some investors as
foreshadowing a potential U.S. economic downturn.
With 2019's first financial quarter ending later this week,
investors are looking ahead to the next three months.
"It's been a good quarter for equities, fixed income and credit,
which really raises the bar to repeat that kind of performance in
the second quarter and brings us back to the point that equities
and fixed-income rallying does not, in principle, make sense if the
global economy is slowing," said Kenneth Broux, senior strategist
at Société Générale.
French gross-domestic-product figures on Tuesday matched market
expectations. Growth figures from the U.S. are due Thursday, and
from the U.K., Spain and Canada on Friday. Some strategists
remained optimistic that the gloomy figures of the first months of
the year will prove temporary.
"When you drill down into core inflation, you're seeing robust
demand, robust wage growth, healthy unemployment data and generally
underlying growth remains pretty healthy," said Benjamin Jones,
senior multiasset strategist at State Street.
In Germany, the yield on 10-year government bonds shrugged off a
weaker-than-expected consumer-confidence survey released Tuesday.
That weak survey reading chimed with similarly downbeat eurozone
purchasing managers index figures at the end of last week.
Germany's DAX index rose 0.6%, while the broader Stoxx Europe
600 index climbed 0.8%.
U.K. assets remained little changed despite lawmakers' decision
late Monday to wrest control of the Brexit process away from Prime
Minister Theresa May.
The gains in Europe followed more mixed trading in Asia. Japan's
Nikkei Stock Average climbed 2.2% thanks to buoyant pharmaceuticals
and transportation stocks, while mainland China stocks fell ahead
of the resumption of cabinet-level trade negotiations between the
U.S. and China.
Write to David Hodari at David.Hodari@dowjones.com and Corrie
Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
March 26, 2019 14:23 ET (18:23 GMT)
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