Drop in Commodities Damps U.S. Stocks
May 04 2017 - 3:08PM
Dow Jones News
By Akane Otani and Riva Gold
U.S. stock indexes wavered Thursday, pressured by a steep drop
in commodity prices.
Major stock indexes have climbed over the past few weeks as
quarterly earnings results have pointed to health among U.S.
corporations. The U.S. posted the biggest improvement in its
revision ratio -- which measures the ratio of upward and downward
earnings estimates by analysts -- of all regions in April,
according to Bank of America Merrill Lynch.
Solid earnings could help stocks continue advancing, investors
and analysts say, even as some have expressed concerns about recent
weakness in inflation, consumer spending and economic growth.
"The earnings story is still very robust, and that's why
investors have been able to look through some of the softer
economic data," said Jason Draho, head of tactical asset allocation
Americas at UBS Wealth Management.
The Dow Jones Industrial Average fell 22 points, or 0.1%, to
20935. The S&P 500 edged up less than 0.1%, and the Nasdaq
Composite was down less than 0.1%.
The S&P 500 consumer staples sector rose 0.7% on Thursday,
boosted by gains in shares of Kellogg. The cereal maker's stock
jumped 2.2% after it posted quarterly earnings that beat
expectations. Monster Beverage rose 2.8%, and General Mills added
1.9%.
Commodity prices slid across the board, putting pressure on
shares of energy companies. U.S. crude oil for June delivery
declined 4.8% to $45.52 a barrel, settling at its lowest level
since November. Energy shares in the S&P 500 fell 1.7%, with
Dow component Chevron falling 1.7%.
Metals slid amid concerns about Chinese demand for commodities
such as steel and iron. Copper for May delivery fell 1.2% to
$2.5020 a pound, its lowest settlement since January, while gold
for May delivery slid 1.6% to $1226.50 an ounce in its biggest
one-day slide since December.
Government bonds slipped Thursday, with the yield on the 10-year
U.S. Treasury note rising to 2.352%, according to Tradeweb, from
2.309% on Wednesday. Yields rise as bond prices fall.
Elsewhere, the Stoxx Europe 600 rose 0.7%, closing at its
highest level since August 2015, after a measure of activity in the
eurozone's manufacturing and services sectors rose to a six-year
high and retail sales figures improved.
"For the first time since the European sovereign debt crisis
broke out, we have a synchronized economic upswing in almost all
continental European economies," said Frank Engels, head of
multi-asset portfolios at Union Investment.
The Shanghai Composite Index fell 0.3%, ending lower for a third
straight session, after a measure of service-sector activity in
China hit its lowest level in nearly a year for April.
"I don't see catastrophe, but I do think there's a lot of
complacency in emerging-market assets around China," said Tina
Byles Williams, chief investment officer and chief executive at FIS
Group.
South Korean equities powered to record highs, adding 1%
Thursday, while Japan's markets were closed for a holiday.
Write to Akane Otani at akane.otani@wsj.com and Riva Gold at
riva.gold@wsj.com
(END) Dow Jones Newswires
May 04, 2017 15:53 ET (19:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Tesla (NASDAQ:TSLA)
Historical Stock Chart
From Apr 2024 to May 2024
Tesla (NASDAQ:TSLA)
Historical Stock Chart
From May 2023 to May 2024