U.S. Stocks Rise as Earnings Confirm Growth Bets: Markets Wrap

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(Bloomberg) — U.S. equities slipped from all-time highs as technology shares faltered ahead a batch of earnings reports from industry heavyweights.

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The S&P 500 slipped from an all-time high, with Tesla Inc., Microsoft Corp., Apple Inc. and Alphabet Inc. contributing the most to the decline. 3M Co. weighed on the Dow Jones Industrial Average after delivering its quarterly results. Treasury yields rose.

Tesla fell to a two-week low after its earnings report failed to impress investors. Microsoft Corp. and Google parent Alphabet are due to report after the close of trading on Tuesday. With much of the earnings optimism already factored into stocks trading near records, investors may be waiting for stronger beats to fan the next move higher.

Four out of five S&P 500 Index companies that have released results so far have either met or beaten expectations. On average, S&P 500 company shares have gained less than 0.1% after their reports, according to data compiled by Bloomberg. While equity investors have offered a sluggish response, it served to highlight traders’ lofty expectations rather than doubt over the outlook.

“Muted stock-price reaction to the robust numbers is largely due to already elevated expectations going into the reporting season,” strategists led by Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note. “The strong results give us greater confidence that (U.S.) corporate profits will grow more than 30% in 1Q.”

© Bloomberg Copper fuels commodity index’s jump to three-year high

Meanwhile, U.S. data this week are expected to show growth accelerated to an annualized 6.8% in the first quarter. A Conference Board measure Tuesday may show U.S. consumer confidence surged for a fourth successive months to the highest level since March 2020.

Such reports aren’t shifting the Federal Reserve’s highly accommodative stance, with the central bank expected to keep policy unchanged at this week’s meeting.

The Stoxx Europe 600 Index slid as investors weighed the scope for further gains. HSBC Holdings Plc rose after saying quarterly earnings more than doubled and returning to profit in Europe and the U.S.

Copper led the Bloomberg Commodity Index higher, as the growth-sensitive metal extended a rally on the U.S. administration’s plans for a large infrastructure package. Oil climbed after OPEC+ projected a strong recovery beyond near-term demand destruction from India’s Covid-19 surge.

Here are some key events to watch this week:

Fed Chair Jerome Powell holds a press conference Wednesday following the Fed meetingJoe Biden makes his first address as president to a joint session of Congress WednesdayU.S. GDP is forecast to show growth strengthened in the first quarter, bolstered by government stimulus ThursdayFor live updates and commentary on the markets see the MLIV blog

These are some of the main moves in markets:

Stocks

The S&P 500 fell 0.1% as of 10:09 a.m. New York timeThe Dow Jones Industrial Average fell 0.1%The Nasdaq 100 fell 0.4%The Stoxx Europe 600 Index decreased 0.2%The MSCI Emerging Market Index was little changed

Currencies

The Bloomberg Dollar Spot Index rose 0.1%The euro was little changed at $1.2083The British pound was little changed at $1.3910The Japanese yen fell 0.3% to 108.43 per dollar

Bonds

The yield on 10-year Treasuries advanced two basis points to 1.59%Germany’s 10-year yield was little changed at -0.25%Britain’s 10-year yield advanced one basis point to 0.76%

Commodities

West Texas Intermediate crude rose 1% to $63 a barrelGold futures rose 0.2% to $1,783 an ounce

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