Dow dips, but stocks mostly higher as investors attempt to shake off tax jitters

What are major benchmarks doing?

• The Dow Jones Industrial Average
  DJIA,
  +0.16%
  erased a modest early decline to rise 9.90 points to 33,825.80.
• The S&P 500
  SPX,
  +0.51%
  was up 17.91 points, or 0.4%, at 4,152.89.
• The Nasdaq Composite
  COMP,
  +0.83%
  rose 97.46 points, or 0.7%

On Thursday, the Dow tumbled 321.40 points, or 0.9%, for its biggest one-day fall since March 4, while the S&P 500 and Nasdaq Composite also fell 0.9%.

What’s driving the market?

Stock index futures suggest some recovery Friday, to end a down week for the market, after stocks turned south in early afternoon trade Thursday when Bloomberg News and others reported that Biden would propose a hike in the capital-gains tax rate to 39.6% from 20% for individuals making more than $1 million a year. While the reports dented sentiment, analysts noted that the proposal was in line with Biden’s campaign promises and noted expectations a hike would be scaled back in congressional negotiations.

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“The 39.6% figure is very much in line with the campaign pledge and shouldn’t shock, but the fact we’ve seen selling of risk suggests the market is far more sensitive to bad news, and this will happen when froth is prevalent,” said Chris Weston, head of research at Pepperstone, in a note.

“Consolidation seems to the order here in the short-term and it feels like we’re at the mercy of a period of choppy price action,” he said.

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The IHS Markit purchasing managers index for the manufacturing sector rose to a record 60.5 in April from 59.1 a month earlier, while the services sector PMI jumped to 63.1 from 60.4. A reading of more than 50 indicates an expansion in activity.

March new-home sales figures are set for release at 10 a.m. Eastern and are expected to rise to an 888,000 seasonally adjusted annual rate from 775,000 in February.

Which companies are in focus?

• Intel Corp.
  INTC,
  -5.77%
  shares were down 6.5%, despite a big earnings beat and raised annual guidance, as a large dip in data-center sales was offset by strength in sales of personal computers and a departing memory business.
• Shares of Snap Inc.
  SNAP,
  +6.62%
  rose 6% after the social-media company posted first-quarter results that surpassed analyst estimates.
• Mattel Inc.
  MAT,
  +4.65%
  shares were up 9.4% after the toy maker reported a narrower-than-expected quarterly loss and said its sales surged nearly 50%.
• Boston Beer Co.
  SAM,
  +1.52%,
  known for its Sam Adams-branded beers, reported earnings late Thursday that soared past analyst expectations, buoyed in part by sales of hard seltzers. Shares were up 2.5%.
• Shares of Dow component Honeywell International Inc.
  HON,
  -2.01%
  were off 2.7% after beating Wall Street estimates for earnings and revenues and revising its 2021 outlook.
• Schlumberger Ltd.
  SLB,
  +0.67%
  shareswere flat after the energy-services giant posted better-than-expected earnings for the first quarter.
• Shares of American Express Co.
  AXP,
  -2.78%
  fell 3.3% after the card company’s first-quarter revenue fell short of expectations.
• Kimberly-Clark Corp.
  KMB,
  -5.43%
  stock fell 5% after the consumer products company, whose brands include Kleenex, Huggies, Scott and Depends, reported first-quarter profit and sales that came in below expectations, and lowered its full-year outlook. 

What are other markets doing?

• The yield on the 10-year Treasury note
  BX:TMUBMUSD10Y
  rose 0.1 basis point to 1.562%. Yields and bond prices move in opposite directions.
• The ICE U.S. Dollar Index
  DXY,
  -0.33%,
  a measure of the currency against a basket of six major rivals, fell 0.4%.
• Bitcoin
  BTCUSD,
  -4.66%
  fell sharply in a move that some observers tied to tax jitters, with the digital asset falling below $50,000.
• Oil futures edged higher in choppy trade, with the U.S. benchmark
  CL00,
  +0.60%
  up 0.4% at $61.66 a barrel.
• Gold futures were little changed, with the June contract
  GCM21,
  
  at $1,782.50 an ounce.
• In Europe, the Stoxx 600 index
  SXXP,
  -0.52%
  and London’s FTSE 100
  UKX,
  -0.45%
  each fell 0.5%.
• In Asia, the Shanghai Composite
  SHCOMP,
  +0.26%
  rose 0.3%, Hong Kong’s Hang Seng Index
  HSI,
  +1.12%
  jumped 1.1% and Japan’s Nikkei 225
  NIK,
  -0.57%
  fell 0.6%.