Stocks Edge Up But Remain on Track for Weekly Declines
April 23 2021 - 9:40AM
Dow Jones News
By Anna Hirtenstein
U.S. stocks edged up Friday, on pace to recover some of
Thursday's losses, as investors continued to digest reports that
President Biden is considering nearly doubling capital-gains taxes
on the wealthy.
The S&P 500 ticked 0.4% higher, reversing some of the 0.9%
drop that the index suffered on Thursday. Still, the index is on
track to end the week lower, which would break a four-week streak
of gains.
Technology stocks were among those that helped push the
benchmark index higher Friday morning and helped lift the Nasdaq
Composite 0.7%. The Dow Jones Industrial Average, meanwhile, traded
relatively flat. Those indexes are also on pace for weekly
losses.
Stocks have been choppy this week as sentiment wavered between
concerns about fresh waves of Covid-19 infections around the world
and optimism prompted by promising economic data. Weekly jobless
claims last week hit the lowest point since the pandemic began,
indicating that the U.S. labor market is improving. Money managers
are looking to companies' projections and other key indicators to
gauge whether the economic recovery will stay on track and justify
high valuations for stocks.
"Data is taking on more meaning," said Georgina Taylor,
multiasset fund manager at Invesco. "We've had all the hope built
into expectations, but ultimately, we still need earnings to
continue recovering, at the same time as we need reassurance that
economic data is reflecting those stronger expectations."
Investors on Friday also looked to other encouraging data. U.S.
private sector output growth hit a fresh series record in April,
IHS Markit said. Similar surveys indicated that Europe is starting
to participate in the recovery.
"Expectations are very high for the U.S., we're entering a very
strong quarter," said Esty Dwek, head of global market strategy at
Natixis Investment Solutions. "The reopening is accelerated,
vaccinations have accelerated a lot through March and April. So
they will be a confirmation of these very strong trends in the
U.S."
In corporate news, Intel declined 6.4% after the semiconductor
company on Thursday posted a moderate drop in revenue. The CEO said
the global chip shortage could last for another two years. Snap,
developer of social-media app Snapchat, jumped 7.9% after reporting
a 66% rise in quarterly revenue and strong user growth.
American Express slipped 3.8% after it said its revenue
declined, missing analysts' expectations. Personal care and paper
products maker Kimberly-Clark fell about 5% after it lowered its
guidance for the year, saying that there were near-term challenges
after a quarter of supply chain disruptions and higher input
costs.
In bond markets, the yield on the 10-year Treasury note ticked
up to 1.563%, from 1.554% on Thursday.
Bitcoin fell more than 10% and traded below $50,000, according
to data from CoinDesk. The cryptocurrency has been dropping since
last weekend. It had risen above $63,000 and hit a record last
week.
"Bitcoin is not immune to reduction in global risk appetite.
Biden's latest tax proposal that shook the equity market on
Thursday, this put a strain on investor sentiment," said Joel
Kruger, a strategist at LMAX Group, a currencies and cryptocurrency
exchange. "Short term, because it is an emerging asset that is
still trying to find its legs, it is exposed to risk-off
events."
Overseas, the pan-continental Stoxx Europe 600 pulled back 0.6%,
weighed down by the reports of Mr. Biden's tax plans.
The Shanghai Composite Index rose 0.3%, and Hong Kong's Hang
Seng Index added 1.1%. Japan's Nikkei 225 ticked down 0.6%.
India's benchmark stock index declined 0.4%, shedding 2% for the
week. The country reported the world's biggest daily jump in
Covid-19 cases on Thursday.
-- Caitlin McCabe contributed to this article.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
April 23, 2021 10:25 ET (14:25 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.