Stocks Drop Amid Earnings Caution; Dollar Recovers: Markets Wrap

Japanese shares and U.S. futures dropped after sobering comments from Amazon and Apple about the impact of the coronavirus. The dollar pared overnight losses and Treasury yields ticked lower.

Asian trading was limited Friday, with much of the region out on holidays. After U.S. markets closed, Amazon.com warned of a possible second-quarter loss, while Apple omitted an earnings forecast for the first time in more than a decade. Earlier, the S&P 500 Index fell from a seven-week high in wake of a larger-than-expected jump in U.S. jobless claims. Strong results from Microsoft Corp., Facebook Inc. and Tesla Inc. had limited losses on the tech-heavy Nasdaq gauges.

Despite falling on the final trading day of April, global stocks posted their biggest monthly gains in almost a decade, with the S&P 500 up the most since 1987. Investors continue to weigh a brutal economic picture against hopes for a coronavirus treatment and an eventual end to lockdown measures across the world. Still, earnings reports from tech giants show some parts of the economy have remained resilient.

“It’s encouraging you’re seeing big tech earnings come in strong, but there’s still challenges,” said Brian Price, head of investment management for Commonwealth Financial Network.“There’s going to be a push-pull in the market for the foreseeable future.”

27,327 in U.S.Most new cases today

-15% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​106 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-0.​5% Global GDP Tracker (annualized), March


On the virus front, U.S. cases increased at the slowest past of the month, while U.K. Prime Minister Boris Johnson said Britain is past the peak of the outbreak. U.S. Food and Drug Administration Commissioner Stephen Hahn said the agency is moving at “lightning speed” to review data on Gilead Sciences’ experimental Covid-19 treatment.

Meanwhile, European stocks fell amid a barrage of badeconomic readings and European Central Bank President Christine Lagarde’s projection that the euro-area economy could shrink 12% this year. The ECBintensified its response to the coronavirus crisis and the Federal Reserve said it planned to expand its Main Street Lending Program.

Oil headed for its first weekly gain in a month following early signs that demand may be bottoming out as global production cuts deepen.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 dropped 1% as of 9:08 a.m. in Tokyo after the index fell 0.9% Thursday.
  • Japan’s Topix Index fell 0.8%.
  • Australia’s ASX/S&P 200 slumped 2.5%.
  • The Stoxx Europe 600 Index decreased 2% Thursday.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%.
  • The euro fell 0.2% to $1.0939.
  • The British pound fell 0.2% to $1.2572.
  • The Japanese yen fell 0.2% to 107.37 per dollar.
  • China’s offshore yuan was down 0.2% at 7.0929 per dollar.

Bonds

  • The yield on 10-year Treasuries fell one basis point to 0.63%.
  • Australian 10-year yields were at 0.90%.

Commodities

  • West Texas Intermediate crude gained 5.7% to $20.40 a barrel.
  • Gold weakened 0.2% to $1,683 an ounce.

— With assistance by Sophie Caronello

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