Stocks wobble as traders weigh earnings, economy - BNN

Stocks were mixed as traders assessed corporate earnings and economic data, with the Federal Reserve getting ready to wind down stimulus.

Losses in technology companies in the S&P 500 offset gains in commodity and consumer-discretionary firms. The Dow Jones Industrial Average earlier touched the 36,000 level for the first time. A gauge of small caps climbed about 2.5 per cent. A basket of retail-trader favorites tracked by Bloomberg is on pace for its best day since late August, led by a rally in GameStop Corp.

More than 80 per cent of companies in the U.S. equity benchmark reporting third-quarter results have topped Wall Street estimates. That has laid the groundwork for a nearly 6 per cent gain in stocks since the earnings season began. Meanwhile, data showed persistent supply-chain challenges weighed on manufacturers in October. Fed officials meet this week as investors fret the economy is facing the most-widespread supply crunch since the oil crisis of 1973.

“As usual, there’s no shortage of things to worry about,” said Evan Brown, head of asset allocation at UBS Asset Management. “I would just say that stocks climb the wall of worry. We do anticipate more of a rotation as people gain more faith that the economy is on sounder footing. We should see rebalancing from growth stocks into value stocks.”

For Morgan Stanley strategist Michael Wilson, the bullish trend for equities may continue into the Thanksgiving holiday later this month, but “not much longer” as the Fed is expected to start tapering and earnings growth will slow further into next year.

Some other corporate highlights:

• Electric-vehicle giant Tesla Inc. jumped amid a lithium supply deal and the start of the COP26 climate summit.
• A little known biotech company, ABVC BioPharma Inc., soared amid increasing chatter on social network StockTwits.
• Moderna Inc. slumped as the U.S. Food and Drug Administration will require additional time to assess the company’s emergency request to approve its COVID-19 vaccine for children ages 12 to 17. 

Here are some events to watch this week:

• Reserve Bank of Australia policy decision, Tuesday
• Fed rate decision, U.S. factory orders and durable goods, Wednesday
• OPEC+ meeting on output, Thursday
• Bank of England rate decision, Thursday
• U.S. trade, initial jobless claims, Thursday
• U.S. unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.1 per cent as of 2:10 p.m. New York time
• The Nasdaq 100 fell 0.1 per cent
• The Dow Jones Industrial Average was little changed
• The MSCI World index rose 0.2 per cent
• The Russell 2000 Index rose 2.3 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.4 per cent to US$1.1600
• The British pound fell 0.2 per cent to US$1.3660
• The Japanese yen was little changed at 114.01 per dollar

Bonds

• The yield on 10-year Treasuries advanced one basis point to 1.56 per cent
• Germany’s 10-year yield was little changed at -0.10 per cent
• Britain’s 10-year yield advanced three basis points to 1.06 per cent

Commodities

• West Texas Intermediate crude rose 0.5 per cent to US$83.96 a barrel
• Gold futures rose 0.7 per cent to US$1,795.90 an ounce

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Stocks wobble as traders weigh earnings, economy - BNN
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