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Stocks were mixed Wednesday, following a day of losses triggered by Treasury Secretary Janet Yellen.
In morning trading, the
slid 36 points, or 0.1%, while the
rose 0.2%, and the
advanced 0.3%.
Asian stocks finished mostly higher, while the Stoxx Europe 600 index climbed 1.5%, lifted by a bevy of well-received earnings results and shares of companies geared toward reopenings as Covid-19 vaccines have picked up in the region.
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A decline in technology stocks was already under way on Tuesday when Treasury Secretary Yellen added to the pressure, by suggesting interest rates may need to rise if the U.S. economy starts to overheat due to President Joe Biden’s planned spending, at a conference organized by The Atlantic magazine.
Yellen later walked back that comment at a Wall Street Journal conference. “If anybody appreciates the independence of the Fed, I think that person is me,” she said.
Recent strong economic data have rattled some investors, who fear that indeed the Federal Reserve may need to raise interest rates, which would make it tough for tech stocks already viewed as expensive by some. Federal Reserve Chair Jerome Powell has repeatedly insisted monetary policy will remain easy until the U.S. jobs picture improves.
“There is no doubt that the U.S. equity markets were due a correction as the prices went too far and too fast, and Yellen’s comments took a lot of froth out of the markets. Having said that, we do see some bargain hunters stepping in today,” said Naeem Aslam, chief market analyst at AVA Trade, in a note to clients.
The U.S. economy added 742,000 private sector jobs in April, below the expected 800,000, but above the prior month’s add of 565,000, according to payroll processing firm ADP. The report comes ahead of Friday’s U.S. jobs data, where economists surveyed by Dow Jones Newswires and The Wall Street Journal are expecting one million new jobs were created last month.
“I expect the reflation to be the major play for the rest of the week, as besides the inflation worries, the expectation of another solid month in terms of U.S. jobs data should keep investors away from the volatile tech stocks,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.
(ticker: LYFT) shares slipped 3.9%, reversing a premarket gain, after the ride-sharing company posted better-than-expected first-quarter results.
Shares of
(ATVI) surged 3.3% after the videogame publisher blew past consensus estimates for first-quarter estimates and raised full-year guidance.
Shares of
(CZR) were climbing 6.1% after the casino company revealed another big loss in the first quarter, but spoke of sold out Las Vegas weekends on a conference call.
(XOM) stock gained 2.8% after getting upgraded to Buy from Hold at DZ Bank.
(KHC) shares fell 0.4% after getting downgraded to Hold from Buy at DZ Bank.
(UAA) stock gained 7.9% after getting upgraded to Overweight, Buy and Neutral at Barclays, UBS and Atlantic Equities, respectively.
Write to Barbara Kollmeyer at bkollmeyer@marketwatch.com and Jacob Sonenshine at jacob.sonenshine@barrons.com
