Before The Bell - Stock trading was mixed yesterday. After most Asian markets posted solid gains, Europe went in the opposite direction, with France’s CAC-40 and Germany’s DAX shedding 1.3% and 0.7%, respectively, while the U.K.’s FTSE 100 ended just above breakeven. On our shores, investors were hoping stocks would add to the back-to-back gains that closed out the past week. Shares opened in negative territory, but the trend was up for most of the day.
A couple of factors appeared to weigh on trader sentiment. Among them, a resurgence of cases in Seoul, Korea and Wuhan, China, and a large spike in Russia, even as many countries move to ease lockdown restrictions. Meanwhile, earnings season continued to chug along, with the news remaining mostly negative. Most companies’ results were down significantly in the first quarter, due to the initial impact of business closures and stay-at-home orders. Moreover, investors faced the prospect of even more grim numbers likely to emerge for the second quarter.
At the close, the Dow Jones Industrials ended the session with a loss of 109 points, or .5%, the broader S&P 500 gained a fraction of a point, while the tech-heavy NASDAQ fared the best of the lot, advancing 71 points, or about .8%, and racking up its sixth-straight up day. Most of the major market sectors lost ground, with the biggest declines coming from basic materials (down 2.3%), and energy shares (-1.5%). On the positive side of the ledger, healthcare issues gained 1.9%, while technology stocks advanced .8% Altogether, the volume of declining shares was nearly three times that of advancing issues.
Elsewhere oil prices ended at around breakeven, with light sweet crude at about $24.75 a barrel. The commodity is up more than 16% over the past five sessions, following the production cut agreement among oil producers at the start of the month, and Saudi Arabia’s more recent announcement saying that it would produce 1 million fewer barrels a day beginning in June. Oil is down 60% from a year ago, reflecting lower demand in the wake of the coronavirus and excess supply.
As we look to the new day, results overseas have been mixed. Stocks in Asian markets closed down, but the European bourses are mostly showing gains. Meanwhile, U.S. stock futures are pointing to an up opening for the major indexes, following this morning’s report of a .8% decline in the Consumer Price Index (CPI) for April, which was on target with expectations. Looking ahead to Friday, we get retail sales and industrial production reports for April. Expectations are low, however, as both figures are likely to be down in the low double digits.
Developments on the coronavirus front will undoubtedly continue to steer stocks in the weeks ahead.