MARKET SNAPSHOT
U.S. stocks finished higher with the Nasdaq Composite closing at a record as investors awaited consumer-price data due Wednesday. Treasury yields and the dollar finished lower after a downward revision to producer-price data for March took some of the sting out of an unexpectedly hot reading for April. Oil fell as OPEC kept its demand forecast unchanged. Gold settled higher.
MARKET WRAPS
EQUITIES
Stock indexes traded at or near records after traders took in one inflation report and looked ahead to another that will offer a much-anticipated look at how consumer prices have been faring.
The Nasdaq Composite closed up about 0.8% at a record -- its first since April 11. The S&P 500 rose 0.5% to just shy of a record, while the Dow Jones Industrial Average ended 0.3% higher.
A report on wholesale prices offered mixed signals for investors trying to assess the Federal Reserve's path forward in its fight against inflation. The producer-price index rose more than economists expected in April, but was revised lower for March. Investors could be forced to reassess their optimism after Wednesday's release of the consumer-price index.
Earlier in the day, Chinese shares were mixed as gains in auto stocks offset losses in the energy sector.
The benchmark Shanghai Composite Index closed 0.1% lower, the Shenzhen Composite Index rose about 0.4%, and the ChiNext Price Index lost 0.3%. Hong Kong's Hang Seng benchmark index edged 0.2% lower as investors awaited Tencent results. Energy stocks led the losses.
Japan's Nikkei Stock Average rose 0.5% in possible position adjustment ahead of the U.S. PPI data.
Australia's S&P/ASX 200 closed 0.3% lower. Large iron-ore miners and most banks finished lower, as 12 of the 14 largest companies by market capitalization closed in the red.
New Zealand's NZX-50 edged 0.3% lower, falling to a near two-month low amid weakness in property stocks. Large-cap stocks were mixed.
COMMODITIES
Oil futures settled at a nine-week low, as the Organization of the Petroleum Exporting Countries left its monthly forecasts largely unchanged while traders weighed the outlook for interest rates and their potential impact on energy demand.
West Texas Intermediate crude for June delivery fell 1.4% to settle at $78.02 a barrel, the lowest front-month finish since March 12. July Brent crude, the global benchmark, declined 1.2% to $82.38 a barrel.
Oil prices declined after a "lackluster" monthly OPEC report and as uncertainty over the path for interest rates has worsened, said Samer Hasn, market analyst at XS.com. The OPEC report "did not bring anything new regarding future expectations for this year and next year," he said.
Front month Comex May gold gained 0.7% to $2353.40 -- and is up for three of the past four sessions. "Gold is pushing at all-time highs, the question is how much higher they can push," Taylor Krystkowiak of Themes ETFs said.
Meanwhile, front month Comex May copper settled up 3.1% at $4.9535, a record high.
TODAY'S TOP HEADLINES
Fed Chair Jerome Powell Maintains Wait-and-See Posture on Inflation and Rates
Federal Reserve Chair Jerome Powell affirmed the central bank's plans to hold interest rates at the highest level in more than two decades as it awaits evidence that a slowdown in inflation will resume after setbacks this year.
Powell said he expected inflation to continue heading lower but that he was less confident than he had previously been about that outlook, leaving the Fed unable to say whether or when it might be able to lower interest rates.
"We're just going to have to see where the inflation data fall out," he said during a moderated discussion in Amsterdam on Tuesday.
Wholesale inflation surges again, PPI shows, leaving Inflation still sticky
The numbers: U.S. wholesale prices jumped 0.5% in April in another sign of sticky inflation.
Economists polled by the Wall Street Journal had forecast a smaller 0.3% increase in the producer price index.
Wholesale costs often foretell future inflation trends. The increase in wholesale prices over the past 12 months rose to 2.2% in April from 1.8% in the prior month and hit the highest level in a year.
Google to Roll Out AI Search Summaries to Billions by Year-End
Google will show artificial-intelligence-powered answers to billions of people using its namesake search engine by the end of the year, broadening its rollout of the technology as it tries to fend off growing competition in its core business.
The move, starting this week in the U.S., strengthens Google's embrace of generative AI, computer programs that can produce fluent text and other kinds of media.
Investors and competitors consider the rollout a barometer of the search giant's confidence in the technology-and its willingness to reshape the way people interact with information online. The rollout will be watched closely for how it affects Google's hundreds of billions of dollars in advertising sales and its relationship with online publishers that rely on the search engine for valuable traffic.
Alibaba Quarterly Profit Sinks Despite Rise in Sales
Alibaba Group's profit sank in the latest quarter, even as revenue growth picked up due to higher sales in its key e-commerce, cloud and logistics businesses.
The Chinese company said Tuesday that net income in its fiscal fourth quarter ended March fell 86% from a year earlier to 3.27 billion yuan ($452.1 million), well short of expectations for CNY15.27 billion in a FactSet poll of analysts. Alibaba said the bottom line was hurt by a net loss in investments during the quarter due to mark-to-market changes.
Adjusted net profit, which excludes the effects of share-based compensation expenses, investment gains and losses, some impairments and other items, fell 11% to CNY24.42 billion, missing analysts' expectations of CNY25.47 billion.
Anglo American Plots Breakup After Rejecting $43 Billion BHP Bid
Anglo American plans to unload several assets and focus more on commodities linked to green energy, part of a turnaround effort aimed at winning over investors after rejecting a $43 billion takeover bid from rival BHP Group.
The mining company said Tuesday that it would spin off its platinum-metals subsidiary, divest or demerge its diamond unit De Beers, sell its steelmaking coal assets and explore options for suspending putting its nickel operation and divesting it.
Anglo said the plan will focus its portfolio around assets that support the transition to greener energy. Chief among those is copper, which will be even more central to the company's future, with demand for the metal expected to rise as the world decarbonizes and supply tightens. Iron ore and crop nutrients will also remain key businesses for the company.
Expected Major Events for Wednesday
01:00/AUS: Apr Vacancy Report
01:30/AUS: 1Q Wage Price Index
04:00/INA: Apr Trade Balance
04:00/AUS: May Monthly Leading Indicator of Employment
08:59/SKA: 2H KDI Economic Outlook
08:59/SKA: Apr Revised trade data
09:59/PHI: Mar Overseas Filipino Workers Remittances figures
09:59/CHN: Apr FDI Foreign Direct Investment
14:30/AUS: Mar Australia Conference Board Leading Index
23:50/JPN: 1Q 1st Preliminary Quarterly GDP Estimates
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(END) Dow Jones Newswires
May 14, 2024 17:02 ET (21:02 GMT)
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