Global mkts dip on tech sector; US yields scales four-year high
Dollar hits two-week high versus peers
NEW YORK, April 21, (RTRS): A US bond sell-off continued for a second day on Friday, pushing the 10year Treasury yield to its highest level in more than four years and steepening the yield curve after two weeks of flattening.
World stock markets dipped as worries about a global slowdown in smartphone demand dented the technology sector, while oil prices fell after US President Donald Trump sent a tweet criticizing OPEC and then mostly recovered.
The higher yields seemed to reflect a technical shift in the market, rather than a jump in investor confidence in the US economy or rising inflation, so analysts are regarding the steeper curve as temporary.
Weakness among tech stocks drove Wall Street equities lower for a second session, following a slide on Thursday by Apple Inc and its suppliers.
A strong earnings season could offset fears of slowing global growth and help stock markets recover from firstquarter volatility, which was fueled by a trade spat between the United States and China and mounting geopolitical tensions over Syria.
The Dow Jones Industrial Average fell 201.95 points, or 0.82 percent, to 24,462.94, the S&P 500 lost 22.99 points, or 0.85 percent, to 2,670.14 and the Nasdaq Composite dropped 91.93 points, or 1.27 percent, to 7,146.13.
The pan-European FTSEurofirst 300 index rose 0.05 percent and MSCI’s gauge of stocks across the globe shed 0.83 percent.
The US dollar index rose to a twoweek high against a basket of peer currencies, while sterling extended a decline in the wake of dovish comments from Bank of England Governor Mark Carney overnight.
The pound continued to fall against the dollar, hitting its lowest against the greenback since April 6.
The dollar index rose 0.42 percent, with the euro down 0.47 percent to $1.2286.
Procter & Gamble fell 2.9 percent on top of a 4.2 percent drop the day before when it said shrinking retailer inventories and higher costs squeezed its margins.
Philip Morris International also had a second day of declines after getting crushed due to weak shipment volumes in its quarterly report.
Apple fell 4.1 percent, making it the biggest drag on the major indexes after Morgan Stanley estimated weak demand for its latest iPhones, a day after Taiwan Semiconductor raised fears of softer smartphone sales.
Alphabet, Facebook, Intel and Mi- crosoft are among the major technology companies reporting next week.
S&P 500 companies are expected to report their strongest firstquarter profit gains in seven years. Of the 87 companies that have reported so far, 79.3 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.
Declining issues outnumbered advancing ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 1.68to-1 ratio favored decliners.
The S&P 500 posted 12 new 52week highs and 22 new lows; the Nasdaq Composite recorded 54 new highs and 51 new lows.
On US exchanges 6.45 billion shares changed hands compared to the 6.92 billion average for the last 20 trading days.
European shares held steady on Friday at the end of a strong week as a rally in commodities softened, although strong earnings updates boosted shares in Ericsson and Telia.
The pan-European STOXX 600 index ended the session flat in percentage terms but remained up 0.7 percent on the week, its fourth straight week of gains, as global markets recovered from a turbulent first quarter.
Jitters over possible trade wars, faster rate hikes in the United States and a regulatory crackdown on big tech groups sent the STOXX to 14-month lows in March.
However, they confirmed their ‘hold’ rating on the stock, saying overall operating margins continued to be low in an unpredictable industry environment.
Cost-cutting has been a key driver for earnings growth in Europe and could also help first quarter results. Companies on the MSCI EMU index are expected to see earnings rising around 15 percent in dollar terms last quarter.
Elsewhere, dovish remarks overnight from Bank of England Governor Mark Carney weakened the pound, helping the internationally exposed FTSE index outperform with a gain of 0.5 percent. The index weathered a 2.8 percent fall in Reckitt Benckiser following another poor update that further stresses gloomy prospects for consumer goods makers.