Stocks Decline; Dollar Strengthens Most in 3 Weeks: Markets Wrap

(Bloomberg) -- U.S. stocks fell for the first time in three days as investors digested mixed corporate earnings and worsening economic data. The dollar strengthened the most in about three weeks and Treasury yields increased.

The S&P 500 and Dow Jones Industrial Average indexes closed lower, while information technology and consumer discretionary sectors kept the Nasdaq Composite in the green as investors continued to bet Apple Inc. and Microsoft Corp. will perform well in the stay-at-home world. A report showed U.S. companies cut a record 20.2 million jobs in April. The Stoxx Europe 600 Index slumped.

“This pandemic has systemically changed the way we live and work,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “If these job losses end up being permanent, that's a horse of a different color due to the negative effect it will have on spending and the economy.”

After the close of regular trading, Lyft Inc. reported moderate growth of the ride-hailing business in a quarter marred by the effects of the coronavirus pandemic.

Yields on 10-year Treasuries rose the most in a week with the U.S. increasing the amount of debt it plans to issue in quarterly refunding auctions to a record high of $96 billion to provide government funding as the economy heads into a recession.

Bonds declined in the euro region as investors fretted over Tuesday's German court ruling criticizing the European Central Bank's easing measures. The euro weakened amid a slew of bleak economic forecasts by the European Union, heading toward its lowest close since mid-March, back when markets were roiled by demand for the U.S. currency. West Texas oil retreated after a rally that had doubled prices in the past five days.

President Donald Trump said Tuesday Americans should begin returning to their everyday lives even if it leads to more sickness and death. Meanwhile, data from Germany provided further evidence of the pandemic's devastating effect, as new cases in the euro area's biggest economy rose ahead of talks on easing restrictions. Traders may have seen a glimmer of hope in earnings from drug makers and online grocers, though insurers, banks and carmakers added to the chorus of companies taking a heavy hit.

For more news on today's corporate reports, read our earnings wrap

“One thing is for sure is that this pandemic health crisis has produced depression-magnitude job losses which means this recovery is going to take longer than many are thinking,” said Chris Rupkey, chief financial economist for MUFG Union Bank.

Elsewhere, shares in Shanghai rose as Chinese traders came back online after a five-day break. Australian equities fell, while Hong Kong and Korean benchmarks advanced. Japanese markets were shut for a public holiday.

Here are some key events coming up:

  • The Bank of England has a policy decision on Thursday.
  • Friday brings the U.S. jobs report for April, expected to show a severe impact from the pandemic. The median forecast in a Bloomberg survey of economists calls for a 21 million plunge in payrolls.

These are some of the main moves in markets:

Stocks

  • The S&P 500 Index fell 0.7% to 2,848.42 as of 4:20 p.m. New York time.
  • The Dow Jones Industrial Average decreased 0.9% to 23,664.64, the lowest in more than a week.
  • The Nasdaq Composite Index gained 0.5% to 8,854.39.
  • The MSCI All-Country World Index dipped 0.4% to 478.02.

Currencies

  • The Bloomberg Dollar Spot Index climbed 0.6% to 1,256.64, the highest in more than a week on the largest increase in almost three weeks.
  • The Japanese yen appreciated 0.4% to 106.10 per dollar, the strongest in seven weeks on the biggest increase in almost three weeks.
  • The euro dipped 0.4% to $1.0793, the weakest in more than a week.
  • The British pound dipped 0.8% to $1.2341, the weakest in more than a week on the biggest decrease in almost two weeks.

Bonds

  • The yield on two-year Treasuries decreased one basis point to 0.18%, the lowest in more than eight years on the largest dip in almost three weeks.
  • The yield on 10-year Treasuries gained three basis points to 0.70%, the highest in almost three weeks on the biggest advance in a week.
  • Germany's 10-year yield climbed seven basis points to -0.51%, the largest surge in almost four weeks.
  • Britain's 10-year yield rose three basis points to 0.231%, the biggest rise in more than a week.

Commodities

  • West Texas Intermediate crude fell 1.4% to $24.14 a barrel, the first retreat in more than a week.
  • Gold weakened 0.9% to $1,687.16 an ounce.

©2020 Bloomberg L.P.

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