Global equities rebound; dollar gains on outlook for earnings

Oil steadies after slump; gold prices fall

first time since Britain’s 2016 vote to leave the European Union.

Japan’s Nikkei ended down 0.45 percent, after initially falling as much as 1.6 percent. China’s Shanghai Composite index eased 0.9 percent and the blue-chip CSI300 was off 0.7 percent.

The slight recovery in risk appetite meant US Treasuries, German Bunds and UK Gilts all saw a bit of selling too in Europe. Yields on 10year notes were all off two- to threemonth lows. Benchmark 10-year US Treasury notes last fell 15/32 in price to yield 2.7844 percent.

US crude rose 0.79 percent to $63.51 per barrel and Brent was at $68.12, up 0.71 percent on the day.

US

US stocks rose on Tuesday as technology shares recovered from a sharp selloff a day earlier, helping the S&P 500 and the Dow stay above an important technical level.

All the 11 major S&P sectors were higher, and 29 of the 30 Dow components were up by mid-day trading.

Stocks slipped into the red for a brief period after President Donald Trump’s latest attack on Amazon but then quickly recovered.

Tesla shares gained 4.3 percent after the electric automaker said it need not raise more capital this year while announcing it built 2,020 of its cheaper Model 3 sedans in the last seven days of March.

Amazon and Tesla were among the top drags on Monday, pushing the S&P 500 below its 200-day moving average for the first time since Britain’s vote to leave the European Union in June 2016.

“In technology sector, you have some bear forces that work, you’ve an election year that’s going to couple into regulation that wasn’t really priced into the marketplace, especially in social media,” said Matt Lloyd, chief investment strategist at Advisors Asset Management.

“It is not that they are going to be severe underperformers but you want to be selective of where you want to be in technology.”

The technology sector has been battered in recent weeks following Facebook’s data scandal, Trump’s intervention against Amazon and concerns around autonomous cars.

At 11:19 a.m. ET, the Dow Jones Industrial Average was up 214.65 points, or 0.91 percent, at 23,858.84, the S&P 500 was up 19.66 points, or 0.76 percent, at 2,601.54 and the Nasdaq Composite was up 60.99 points, or 0.89 percent, at 6,931.11.

Nervous investors are hoping an unusually strong US earnings season can restore some of the optimism that characterized equity markets last year.

“In the immediate term there is pressure, but (there is)nothing in long term because the fundamentals are still in place,” said Lloyd.

Investors will be able to buy and sell shares in the Swedish music streaming service Spotify in the New York Stock Exchange’s firstever direct floor listing.

Viacom Inc dropped more than 3 percent after Reuters reported CBS Corp planned to make an allstock offer that valued the media company below its current market valuation. CBS shares were up 2.5 percent.

Advancing issues outnumbered decliners on the NYSE for a 2.25to-1 ratio. On the Nasdaq, 2.36-to-1 ratio favored advancers.

Europe

European stocks retreated on Tuesday as investors began the second quarter in a fragile mood amid international trade tensions and mounting pressure on big technology companies.

The pan-European STOXX 600 ended the day down 0.5 percent after falling more than 1 percent earlier in the session. The index was supported in afternoon trading by a slight rebound on Wall Street.

Germany’s DAX was a clear underperformer, losing about 0.8 percent while industrials, financials and healthcare stocks weighed on European indexes.

The tech sector dropped 0.8 percent, after an overnight report that Apple plans to replace Intel chips in Macs with its own.

The index has fallen about 7.5 percent in the past three weeks as anxiety grew over big tech companies with the focus on Facebook’s use of data, and regulation of Amazon.

Reports of Apple increasingly going down the “insourcing” route have dented shares in Apple suppliers around the world, most notably Europe’s Dialog Semiconductor, down 3.5 percent.

STMicro shed 2.9 percent, while ams declined 2.3 percent and Infineon fell 2.1 percent.

Risk appetite was poor across the board, as European investors followed US and Asian investors to the exit after China retaliated against US tariffs.

Equities have again entered “oversold” territory, they said, adding, however, that headwinds for technology stocks were increasing.

Outside the tech sector, food services group Sodexo 4.5 percent after Goldman Sachs (GS) cut the stock to “neutral”. Sodexo had already suffered a 15.7 percent decline after warning on profit in the previous session.

Air France shares fell 4.4 percent. The carrier’s unions called a strike for wage increases amid a wider labour stoppage across France paralysing rail services.

Acquisition news also continued to move the European market.

Eurofins Scientific shares fell 2.1 percent, the worst performers on the STOXX, after the firm acquired Lab Frontier in South Korea.

Italy’s largest private broadcaster Mediaset rose 6.4 percent, after signing a content-sharing deal with Sky’s Italian unit and paving the way for a broader alliance.

Also in Italy, Fiat Chrysler Automobiles jumped 7.3 percent after reporting strong US sales.

Asia

Asian stocks finished Tuesday largely on the back foot, following Wall Street lower as fears of a trade war between the United States and China hit market sentiment.

China led the declines, with the main Shanghai Composite index ending down 0.8 percent.

In Tokyo, the benchmark Nikkei 225 index slipped 0.45 percent or 96.29 points to 21,292.29, paring early losses.

Markets in Seoul and Hong Kong were also weaker initially, but Hong Kong recovered to end up 0.3 percent.

Tokyo - Nikkei 225: Down 0.5 percent at 21,292.29 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 30,180.10 (close)

Shanghai - Composite: Down 0.8 percent at 3,136.63 (close)

Dollar/yen: UP at 105.96 yen from 105.76 at 0230 GMT

Gold

Gold prices fell on Tuesday as US stock markets stabilised, easing fears of a deeper expensive for users of other currencies.

Gold had surged on Monday as falling US share prices and fears of a global trade war pushed investors towards safer assets.

But while European stock markets continued to fall, led by technology shares, Wall Street opened broadly higher.

Spot gold was down 0.5 pecent at $1,333.80 an ounce at 1509 GMT after rising 1.3 pecent on Monday, US gold futures were 0.7 percent lower at $1,337.80 an ounce.