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Stocks open mixed as market struggles to rebound from sell-off

Stocks open mixed as market struggles to rebound from sell-off

U.S. stocks rose Thursday morning as markets remain on track to snap a 7-week losing streak.

The S&P 500 climbed as much as 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading, and the Dow Jones Industrial Average gained over 400 points, or 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Nasdaq Composite rose 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} higher as the index attempts to claw its way out of bear market territory.

A rebound in retail earnings spurred markets early in the session, with Macy’s (M) rising as much as 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading after the retail giant raised its profit outlook in an upside surprise to investors weighing a slew of downward forecast revisions from peers.

Shares of discount retailers Dollar Tree (DLTR) and Dollar General (DG) were also up more than 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after both companies raised forecasts on Thursday.

Last week, several retailers, including Walmart Inc. (WMT), have recently slashed their outlooks and warned inflation was likely to weigh on profits.

The moves build on a brief reprieve for equities, which closed higher Wednesday amid a streak of day-to day gyrations. In the first 99 trading days of the year as of Wednesday’s close, the S&P 500 was down 17.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, marking its fourth worst start to a year in history, per data from Compound Capital Advisors.

Investors also digested a bevy of economic releases Thursday morning, including a revised estimate on U.S. GDP that showed economic activity fell at a 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of 2022, upwardly revised from an initial estimate of 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Bloomberg economists had anticipated the second reading to come in at 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Meanwhile, applications for unemployment insurance ticked back down in the latest weekly data to 210,000 in the week ended May 21.

Chip designer Nvidia Corp. (NVDA) joined the growing list of companies reporting weaker second-quarter forecasts and alluding to economic constraints ahead. The company’s stock fell in extended trading Wednesday after Nvidia warned current-quarter revenue was likely to come in $500 million lower due to headwinds from Russia’s war in Ukraine and COVID lockdowns in China. Nvidia shares pared these losses early Thursday, rising 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} about a half hour into the trading session.

Software company Snowflake (SNOW) also cut its forecast late Wednesday, and shares of the company were down as much as 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading on Thursday.

Recent trading sessions have seen sharp drawdowns in some big-name stocks after earnings reports that affirmed investor worries about the impact of inflation on corporate margins. Earlier this week social media giant Snap Inc. (SNAP) tumbled 43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in its biggest-one day drop on record, spurring a sell-off of other digital ad-dependent stocks that dragged the Nasdaq down to its lowest close since November 2020.

Last week, the downswing occurred in retail after Walmart and Target (TGT) set off the recent trend of dramatic pullbacks in individual names following weaker earnings forecasts. According to data from FactSet, S&P 500 companies reporting results for the first quarter have seen the largest negative price reaction to positive earnings per share surprises since 2011.

“Whether it’s today or tomorrow, it does feel like we’re starting to digest what is a seemingly large amount of bad news,” Acorns Chief Investment Officer Seth Wunder told Yahoo Finance Live on Wednesday. “The key thing is to get data that eases some of the pressure off of the Federal Reserve.”

The pickup in disappointing guidance has kept Wall Street on edge for signs the central bank’s interest rate hiking plans will be effective in bringing prices back down to healthier levels. Minutes released Wednesday from the Fed’s May policy-setting meeting indicated the majority of officials were strongly committed to rate hikes of 50 basis points at each of the next two meetings in June and July. So far this year, policymakers bumped short-term borrowing costs by 50 basis points earlier this month and 25 basis points in April.

“Though market participants have feared this stance, it should be noted that the Fed has in excess of $100 billion is securities maturing on its balance sheet coming up, so the resulting asset purchases can help negate growth concerns this summer,” Comerica Wealth Management Chief Investment Officer John Lynch said in an emailed note. “It’s actually a perfect time for the Fed to raise aggressively and send a message to markets that they’re serious about inflation without sending growth into a tailspin.”

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10:17 a.m. ET: Crypto under pressure as tech stocks gain

The start of Thursday’s trading session has been raucous, with the Nasdaq leading the charge up nearly 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} despite both Nvidia and Snowflake giving investors yet another downbeat forecast from former tech high-flyers last night.

Notably, however, crypto was not catching the same bid as the riskiest pockets of the market were rallying.

Bitcoin (BTC-USD) traded back below $29,000 at one point on Thursday morning, while Ethereum (ETH-USD) was down in excess of 8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, falling below $1,800 in morning trade on Thursday.

As we’re drafting this update, there’s a bit of a rebound happening in the crypto space, but this divergence between stocks and crypto — if it holds — is certainly something to watch.

—Myles Udland, senior markets editor at Yahoo Finance

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9:34 a.m. ET: Stocks open mixed as market struggles to rebound from losses

Here were the main moves in markets during the opening bell on Thursday:

  • S&P 500 futures (ES=F): +15.75 (+0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,992.50

  • Dow futures (YM=F): +134.00 (+0.42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,210.00

  • Nasdaq futures (NQ=F): +20.00 (+17.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,962.25

  • Crude (CL=F): +$0.88 (+0.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.21

  • Gold (GC=F): -$2.60 (-0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,843.70 per ounce

  • 10-year Treasury (^TNX): -1.1 bps to yield 2.7490{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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9:07 a.m. ET: US GDP contracted at slightly faster rate in the first quarter

U.S. gross domestic product fell at a 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized rate in the first three months of 2022, according to a revised estimate out of Washington.

The nation’s GDP – the broadest measure of economic activity – was initially believed to logged a 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} contraction between January and March. The second reading came in higher than the revised contraction of 1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Bloomberg economists had anticipated.

In the fourth quarter, economy grew at a robust 6.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} pace. The slowdown comes amid lingering supply chain imbalances, inflation, and disruptions from war in Eastern Europe that weighed on growth.

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8:58 a.m. ET: US jobless claims fall after climbing unexpectedly last week

Applications for unemployment insurance ticked back down in the latest weekly data, underscoring continued strength in the labor market despite higher inflation and worries of an economic slowdown.

The Labor Department’s latest weekly jobless claims report showed 210,000 claims were filed in the week ended May 21, coming in below the 215,000 economists surveyed by Bloomberg had expected. Last week, filings unexpectedly climbed to 218,000, the highest level since January.

Weekly claims continued to hover near a multi-decade low. However, several retailers, including Walmart Inc. (WMT), have recently slashed their outlooks and warned inflation was likely to weigh on profits, raising concerns among market participants that layoffs could be underway.

“Major retailers are reporting margin pressure and softer consumer demand as inflation erodes discretionary spending power and consumers redirect spending dollars from goods to services,” Comerica Chief Economist Bill Adams said in a recent note. “This will lead to slower job growth in the retail and e-commerce industries in the rest of 2022.”

“The stock market selloff could dampen business sentiment and make some businesses more cautious about hiring, especially businesses that are cash flow negative and rely on investors’ money to fund operations like many startups,” he added.

 

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7:22 a.m. ET: Futures jump as the indexes claw back from sell-off

Here’s where stock futures were in pre-market trading Thursday:

  • S&P 500 futures (ES=F): +15.75 (+0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,992.50

  • Dow futures (YM=F): +134.00 (+0.42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 32,210.00

  • Nasdaq futures (NQ=F): +20.00 (+17.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,962.25

  • Crude (CL=F): +$0.88 (+0.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $111.21

  • Gold (GC=F): -$2.60 (-0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,843.70 per ounce

  • 10-year Treasury (^TNX): -1.1 bps to yield 2.7490{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

A person enters the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. REUTERS/Andrew Kelly

A person enters the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. REUTERS/Andrew Kelly

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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Dow slides but tech stocks outperform as Europe’s COVID struggles rattle markets

Stocks traded mixed on Friday, as growing concerns over nationwide COVID-19 lockdowns in Europe raised fears about new restrictions beyond the continent.

The Dow slid 200 points, or 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while the S&P 500 rose 0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, but the Nasdaq composite added 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, bolstered by rallying technology shares. 

Markets were unsettled after the Austrian government announced a full lockdown starting on Monday, in response to cases of COVID-19 surging in Europe. The lockdown will include both those vaccinated and unvaccinated, it will last for 10 days minimum, but could be extended for 10 days further.

“The news is hitting European markets hard this morning as fears mount that the virus and restrictions will spread across the continent again,” said Jim Reid, chief economist at Deutsche Bank, adding that “the curveball might be the U.S.” given lower rates of vaccination domestically than in Europe.

“So although all the headlines are in Europe at the moment, will the U.S. be more vulnerable than many European countries over the course of the full winter? Recent history suggests the U.S. have a higher bar for economic restrictions related to covid but it also has a lower vaccination rate than their European peers,” he added.

The Nasdaq was boosted by a jump in stocks associated with the “stay-at-home” trade that characterized much of 2020. Treasury yields, which have jumped in response to rising inflation fears, retreated early Friday as investors flocked to safe-haven assets. Brent crude (CL=F) sank by over 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, reflecting jitters that lockdowns will curb energy demand.

Meanwhile, shares of air carriers Delta Air Lines, United Airlines and American Airlines, and cruiseliners Carnival Corp and Norwegian Cruise Line fell between 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 

And with the holiday season approaching and cold weather driving more people to meet indoors, public health officials are hoping to mitigate another COVID wave of cases this winter. The FDA on Friday authorized boosters of Pfizer/BioNTech and Moderna COVID-19 vaccines for all adults. 

The U.S House of Representatives on early Friday passed President Joe Biden’s $1.75 trillion bill, however the legislation will be sent to the Senate where negotiations will continue. The bill lays out the Administration’s plans on education, healthcare and the climate.

Also in focus for the markets is Biden’s Federal Reserve chair nomination. Biden told reporters on Tuesday to expect the announcement of a nominee for Fed chair in “the next four days.” The White House has not indicated which way it is leaning, but market participants see two leading options: the reappointment of current chair Jerome Powell, or the elevation of Fed Governor Lael Brainard.

“The market so far is believing that it will be Powell again, but any sort of a change would mean that they want to hear a reiteration of the monetary policy and forward expectations,” Sonali Pier, Pimco’s Managing Director and Portfolio Manager, told Yahoo Finance Live on Thursday.

“[That means] tapering, being at a pace of about $10 billion in treasuries, $5 billion in agency MBS, then thereafter seeing rate hikes but not a significant shift to be more hawkish,” Pier added.

With earnings season ongoing, Foot locker (FL) shares lost ground Friday, even after the athletic shoe and apparel retailer said it expects global supply-chain issues to persist through this quarter. Intuit (INTU) shares soared by over 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after the financial-software company’s top and bottom lines both beat analysts’ expectations, and hiked its full-year revenue guidance for 2021 to $1 billion.

12:53 p.m. ET: The Dow Slides, Tech Outperforms

Here’s where markets were trading midday on Friday:

  • S&P 500 (^GSPC): +8.730 (+0.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,714.09

  • Dow (^DJI): -318.12 (-0.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,732.83

  • Nasdaq (^IXIC): +109.71 (+0.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,101.90

  • Crude (CL=F): -$3.01 (-3.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.00 a barrel

  • Gold (GC=F): -$12.50 (-0.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,848.90 per ounce

  • 10-year Treasury (^TNX): -0.4bps to yield 1.543{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

9:30 a.m. ET: Stocks mixed, tech leads Nasdaq higher

Here’s where markets were trading shortly after market open on Friday:

  • S&P 500 (^GSPC): -6.33 (-0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,698.21

  • Dow (^DJI): -214.78 (-0.60{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,656.17

  • Nasdaq (^IXIC): +39.95 (+0.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16038.10

  • Crude (CL=F): -$1.51 (-1.91{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $77.50 a barrel

  • Gold (GC=F): -$4.20 (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,857.20 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.6040{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

7:30 a.m. ET Friday: Stock futures poised for mixed start

Here’s where markets were trading Friday morning:

  • S&P 500 futures (ES=F): -11.75 points (+0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,689.75

  • Dow futures (YM=F): -194 points (-0.54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,619.00

  • Nasdaq futures (NQ=F): +54.75 points (+0.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,536.00

  • Crude (CL=F): -$2.65 (-3.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.36 a barrel

  • Gold (GC=F): +$1.90 (+0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,863.30 per ounce

  • 10-year Treasury (^TNX): -0.5 bps to yield 1.529{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:28 p.m. ET Thursday: Stock futures open higher

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): +0.5 points (+0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,706.50

  • Dow futures (YM=F): and +33 points (+0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,844.00

Nasdaq futures (NQ=F): +22 points (+0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,503.50

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

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African markets still innovating amid liquidity struggles

Innovations in sustainable finance and digital transformation, alongside critical initiatives in transparency and regulation, will help reinvigorate Africa’s financial markets as they recuperate from the impact of Covid-19.

This is in accordance to research in the latest African Monetary Marketplaces Index from Official Financial and Economic Establishments Forum (OMFIF) in affiliation with Absa Team.

Out of 23 nations around the world in the index, 19 rating decreased than last 12 months. This drop demonstrates much more complicated sector problems, methodological changes, and the inclusion of environmental, social, and governance indicators in the index.

Only 13 international locations in the index have Environmental, Social, and Governance (ESG)-centered procedures in economic markets, and 9 nations have launched sustainable finance products.

Nigeria, South Africa, and  Mauritius and retain their direct in the index, although with scores slipping in 2021 for all three. 

Ghana and Uganda enter the best 5 for the initial time, both earning factors for development in Pillar 6: Enforceability of regular master agreements.

Nigeria gains the direct in Pillar 3: Industry transparency, tax and regulatory atmosphere. Namibia maintains its direct in Pillar 4: Ability of neighborhood buyers, while Egypt tops Pillar 5: Macroeconomic option. South Africa stays on top rated for Pillar 1: Industry depth and Pillar 2: Obtain to overseas exchange. It ties for first with Ghana and Nigeria in Pillar 6: Enforceability of conventional master agreements.

The index actions economical industry development in 23 international locations from across the African continent, highlighting economies with the most supportive environment for effective marketplaces. The purpose of the index is to exhibit how economies can make improvements to the sector framework to bolster investor access and sustainable advancement, and act as a benchmark for traders and plan-makers.

Charles Russon, chief govt of company and investment banking, Absa, reported of the index’s results: ‘While some could possibly uncover it disheartening to see the regular score throughout the board fall, Africa is navigating an extremely difficult financial environment.

He reported  Restoration from the Covid-19 pandemic has not been as straightforward as we would have hoped previous calendar year, and this has had a large impact on the twin issues the continent faces in reinvigorating financial marketplaces write-up-pandemic whilst strengthening sector infrastructure.’