MARKET SNAPSHOT
U.S. stocks ended mixed as earnings took the spotlight amid a lack of fresh economic data. The 10-year Treasury yield declined again with traders focused on Federal Reserve policy. The dollar recovered from the losses it suffered after Friday's weaker-than-expected U.S. jobs data. Oil prices fell as the market weighed geopolitical risk against concerns about demand. Gold prices eased back from a one-week high.
MARKET WRAPS
EQUITIES
The S&P 500 eked out a gain, building on its recent rally as another round of earnings rolled in.
The S&P 500 added 0.1%, bringing its advance for the year to 8.8%. The blue-chip Dow Jones Industrial Average rose 0.2%, logging its fifth straight day of gains. The tech-heavy Nasdaq Composite slipped 0.1%.
After pulling back in April, stocks have staged a comeback more recently on renewed hopes for interest-rate cuts this year. Corporate earnings results for the first quarter so far had also given investors some reason for optimism.
Tuesday's results weren't as rosy. Disney's shares dropped 9.5% after the media giant reported a quarterly loss and issued an earnings outlook that fell shy of Wall Street expectations.
"The valuation overall of stocks doesn't give you a whole lot of room if you're going to have some question mark about what your future is going to look like," said Steve Wyett, chief investment strategist at BOK Financial.
But Wyett said stocks can continue to build on their gains this year as long as it looks like inflation will continue to ease and that the Federal Reserve will cut interest rates.
Earlier Tuesday, Chinese shares ended mixed as the market digested Chinese policymakers' latest signals from the Politburo meeting last week, which emphasized the role of capital markets.
The benchmark Shanghai Composite Index rose 0.2% and the Shenzhen Composite Index added 0.2%, while the ChiNext Price Index shed 0.1%. Hong Kong's Hang Seng Index lost 0.5%.
Japan's Nikkei Stock Average jumped 1.6%, led by gains in brokerage and electronics stocks amid strong domestic earnings.
Australia's S&P/ASX 200 index gained 1.4%, lifted by the central bank's messaging on interest rates and a brighter outlook from the country's biggest power generator.
New Zealand's NZX-50 index slipped 0.2%, as Spark New Zealand tumbled to a more-than-two-year low following Monday's profit warning.
COMMODITIES
Oil futures finished modestly lower, briefly touching their lowest prices since mid-March, after news reports said Russian Deputy Prime Minister Alexander Novak indicated OPEC+ could move to raise crude production.
West Texas Intermediate crude for June delivery shed 0.1% to settle at $78.38 a barrel on the New York Mercantile Exchange after touching a low of $77.55. July Brent crude lost 0.2% to settle at $83.16 a barrel on ICE Futures Europe.
Ultimately, it is up to Saudi Arabia and the other seven OPEC+ countries to decide whether they want to maintain the voluntary production cuts in the second half of the year, Carsten Fritsch, commodity analyst at Commerzbank, said.
Gold prices settled with a loss, a day after posting their highest finish in a week, though prospects for a rally remain as traders continue to monitor developments in the Middle East.
"Gold is holding within the recent range as Israel continues to threaten a full-scale assault on Rafah, while ceasefire negotiations continue," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Gold futures for June delivery fell by 0.3% to settle at $2,324.20 an ounce on Comex.
TODAY'S TOP HEADLINES
U.S. consumers pull back sharply on credit-card use in March
The numbers: Total consumer credit rose at a much slower pace in March, the Federal Reserve reported Tuesday.
Consumer credit rose at a 1.5% annual rate, down from a 3.6% rate in the prior month.
That translates into a $6.3 billion monthly gain in March, following a $15 billion gain in the prior month.
Israeli Forces Seize Key Gaza Crossing Amid Revived Truce Talks
TEL AVIV-Israel sent tanks into Rafah and took control of the Gaza side of a key border crossing to Egypt, securing a strategic corridor as high-stakes negotiations for a truce and hostage releases intensified.
Israeli military footage showed its tanks moving in on the Rafah border crossing, outside the southern Gaza city where over one million people are sheltering from the war. The operation followed a series of Israeli airstrikes against Hamas targets and warnings to civilians in the eastern part of Rafah to move to zones in the west as Israel prepares for a military offensive.
Meanwhile, negotiations toward a cease-fire deal resumed in Cairo after an Israeli delegation, Hamas officials, mediators from Qatar and Central Intelligence Agency Director William Burns arrived in the Egyptian capital on Tuesday.
Reddit shares soar on Q1 revenue beat and narrower-than-expected loss
Reddit Inc. reported its first results as a public company Tuesday, with the social-media platform reporting better-than-expected first-quarter revenue and a narrower-than expected loss.
The company reported a first-quarter loss of $575.1 million, or $8.19 a share, after a loss of $60.9 million, or $1.05 a share, in the prior year's quarter. Analysts surveyed by FactSet expected a loss of $8.75 a share.
First-quarter revenue was $243 million, up from $163.7 million in the prior year's quarter, and well above the FactSet estimate of $214 million.
Tesla Must Detail Driver Warnings, Miles Driven With Autopilot, Regulator Says
A federal regulator wants Tesla to send more information regarding its Autopilot system tied to a December recall of more than two million vehicles, after crashes kept occurring after the recall.
The government last month opened an investigation into the adequacy of the recall, which was deployed through a software update and involved nearly all vehicles Tesla had sold in the U.S. The regulator said it had discovered 20 crashes that occurred after the December recall.
The National Highway Traffic Safety Administration, or NHTSA, in a letter dated Monday, asked Tesla to explain the process and rationale for many of its recall remedies. The agency's requests included an accounting of miles driven per week using the driver-assistance system and how many times drivers have been warned to put their hands on the wheel.
Disney Pares Streaming Losses; Shares Fall on Loss, Earnings Outlook
Disney said it is close to making its streaming business profitable, but its shares fell about 10% Tuesday after the company reported a loss and projected earnings growth that narrowly missed Wall Street expectations.
The media company's streaming unit lost $18 million in the March quarter, an improvement from a $659 million loss in the year-earlier quarter. Chief Executive Bob Iger said the company is on track to achieve streaming profitability in the final quarter of the fiscal year that ends in September.
The company's flagship Disney+ streaming service-home to movies such as "Wish" and TV shows including "Bluey"-added more than six million customers in the March quarter, meeting a rare subscriber forecast that it provided to investors in February.
Expected Major Events for Wednesday
01:00/PHI: Mar Labour Force Survey
01:00/PHI: Mar External Trade Performance
02:00/JPN: Apr Imported Vehicle Sales
07:00/MAL: Apr International Reserves, end of month
08:00/TAI: Apr Merchandise trade
10:59/INA: Apr International Reserves
23:00/SKA: Mar Balance of payments
23:30/JPN: Mar Provisional Labour Survey - Earnings, Employment & Hours Worked
23:50/JPN: Apr International Reserves / Foreign Currency
23:50/JPN: Apr Provisional Trade Statistics for 1st 20 days of Month
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(END) Dow Jones Newswires
May 07, 2024 16:59 ET (20:59 GMT)
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