US Stock Indexes Close Mixed 05/05 16:16
Major U.S. stock indexes closed mixed Wednesday after an early technology
company rebound faded, tempering the market's recovery from a sell-off a day
(AP) -- Major U.S. stock indexes closed mixed Wednesday after an early
technology company rebound faded, tempering the market's recovery from a
sell-off a day earlier.
The S&P 500 eked out a 0.1% gain after having been up 0.7% in the early
going. The Dow Jones Industrial Average managed a 0.3% gain, while the
tech-heavy Nasdaq slid 0.4%.
Financial and energy stocks helped keep the S&P 500 out of the red. JPMorgan
Chase rose 1.3% and Exxon Mobil added 3%. Losses for retailers and other
companies that rely primarily on consumer spending kept those gains in check,
as did a pullback in utilities.
Technology stocks, which led the market's blockbuster rebound in 2020, fell
for the seventh straight day. The sector, one of 11 in the S&P 500, is up 4.6%
this year, the third-smallest gain in the index after consumer staples and
utilities. Energy companies are faring the best with a 38.1% gain so far this
The market's mixed results came as investors remain focused on earnings
reports, which have been better than expected. More than half of the companies
in the S&P 500 have reported their results so far this earnings season, which
show profit growth of 54%, according to FactSet.
"It's been a pretty torrid pace in terms of earnings right now, but not
everyone is being rewarded," said J.J. Kinahan, chief strategist with TD
Ameritrade. "To have your stock at least do OK during earnings season: No. 1
beat on revenue and No. 2 talk about a bright rest of the year trend."
The S&P 500 added 2.93 points to 4,167.59. The benchmark index hit an
all-time high last Thursday. The Dow rose 97.31 points to 34,230.34, while the
Nasdaq dropped 51.08 points to 13,582.42. The Russell 2000 index of
small-company stocks lost 6.92 points, or 0.3%, to 2,241.37.
Stocks had been mostly pushing higher on expectations of an economic
recovery and strong company profits this year as large-scale coronavirus
vaccination programs help people return to jobs and normal activities after
more than a year of restrictions. Massive support from the U.S. government and
the Federal Reserve, and increasingly positive economic data, have also helped
put investors in a buying mood, keeping stock indexes near their all-time highs.
Still, investors remain concerned about the potential for higher inflation,
signs of which are already cropping up as higher prices for oil, lumber and
other commodities. Remarks by Treasury Secretary Janet Yellen suggesting the
Federal Reserve would have to raise interest rates to keep the economy from
overheating, led to a late-afternoon sell-off Tuesday.
Yellen downplayed those remarks, and several Fed officials followed suit
Wednesday, which helped boost stocks, said Steve Chiavarone, equity strategist
at Federated Investors.
"A combination of decent (economic) data, continued good earnings and a
coordinated apology tour were enough to get markets to move back in an upward
direction," he said.
General Motors shares rose 4% after the company posted a solid quarterly
profit compared to a year earlier, but also affirmed its full-year outlook even
as the automaker -- like much of its competition -- contends with a chip
shortage that is impacting production.
Under Armour jumped 6.9% after the athletic apparel company reported
better-than-expected results. Traders also cheered video game maker Activision
Blizzard's latest quarterly report card, driving shares 1.6% higher.
Caesars Entertainment vaulted 7.8% for the biggest gain in the S&P 500 after
the hotel and casino giant said more people are booking rooms as they get
vaccinated and feel comfortable traveling and going out.
Facebook shares fell 1% after the company announced its independent
oversight board would continue to ban former President Donald Trump from the
platform. Trump's account had been suspended indefinitely after the January 6
insurrection at the capital, where his rhetoric has been blamed for the riots.
The board did say that the company must decide if the ban is permanent.
Shares of exercise equipment company Peloton Interactive skidded 14.6% after
the company voluntarily recalled its treadmills after dozens of reports of
injuries to children and pets, and at least one death. The $4,200 treadmill was
the company's biggest expansion beyond its traditional exercise bike program.
Later this week, investors' attention will turn to the jobs report for
April. Economists expect the data to show employers hired 975,000 workers last
month as the economy accelerated out of the pandemic and vaccines rolled out
nationwide. The unemployment rate is expected to drop to 5.8% from 6%.
A private sector jobs report released by payroll processing company ADP
found that private employers created 742,000 jobs last month, which was less
than the 896,000 jobs that were expected by economics.
Bond yields were stable on Wednesday, with the 10-year Treasury note trading
at a yield of 1.57%, down from 1.59% late Tuesday.