U.S. Stocks Mixed on Earnings, Trade; Dollar Falls: Markets Wrap

(Bloomberg) --

U.S. stocks were mixed as investors assessed earnings from some of the world's largest companies amid angst over U.S-China trade talks. Treasury yields and the dollar fell before the Federal Reserve's rate decision.

The S&P 500 Index erased losses and closed at a record high, while the Dow Jones Industrial Average rose on better-than-estimated results from giants Pfizer Inc. and Merck & Co. Meantime, the FAANG group of major technology and internet shares got pummeled as Alphabet Inc. had its worst day since 2012 on a revenue miss. After tumbling on Tuesday, Apple Inc. surged in after-hours trading as its sales forecast topped analyst projections.

Apple Sales Forecast Beats Wall Street Estimates; Shares Rally

Stocks wavered at the end of a strong month amid mixed earnings and a cloudy outlook for trade talks. The White House is ramping up pressure to reach a deal with China in the next two weeks, warning that the U.S. is prepared to walk away. Just a day before the Fed's policy decision, President Donald Trump suggested that if the central bank cut rates by one percentage point and resumed bond purchases it would boost the economy “like a rocket.”

The rally that sent the S&P 500 to record highs may lose steam, but any pullback is likely to “prove limited and temporary”, wrote Tony Dwyer, chief market strategist at Canaccord Genuity. Among the reasons, he cited a dovish Fed, better-than-expected earnings and a stabilization in global growth.

Elsewhere, the euro gained as data showed Europe began 2019 with an unexpected growth spurt, easing pressure on the central bank to add stimulus. Oil rose as police and protesters clashed in the streets of Venezuela, escalating turmoil in the home of the world's biggest crude reserves.

Here are some notable events this week:

• Companies reporting earnings include: HSBC, Macquarie and Royal Dutch Shell.
• U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin landed in Beijing on Tuesday and will head into a new round of talks before Chinese Vice Premier Liu He goes to Washington next week. China and the U.S. hope to seal a deal by early May.
• The U.S. Fed's rate decision is on Wednesday, while the Bank of England sets interest rates Thursday.
• Friday brings the U.S. jobs report: non-farm payrolls are projected to rise by 187,000 in April. Economists expect an unemployment rate of 3.8 percent, with average hourly earnings growth picking up to 3.3 percent.

These are the main moves in markets:

Stocks

• The S&P 500 rose 0.1 percent to 2,945.83 at 4 p.m. New York time.
• The Dow Average gained 0.2 percent, while the Nasdaq-100 sank 0.7 percent.
• The Stoxx Europe 600 Index was little changed.
• The MSCI Asia Pacific Index dipped 0.1 percent.

Currencies

• The Bloomberg Dollar Spot Index declined 0.3 percent.
• The euro gained 0.3 percent to $1.1216.
• The British pound increased 0.8 percent to $1.3036.
• The Japanese yen rose 0.2 percent to 111.44 per dollar.

Bonds

• The yield on 10-year Treasuries declined two basis points to 2.50 percent.
• Germany's 10-year yield increased one basis point to 0.01 percent.
• Britain's 10-year yield rose three basis points to 1.185 percent.

Commodities

• The Bloomberg Commodity Index rose 0.1 percent.
• West Texas Intermediate crude climbed 0.7 percent to $63.91 a barrel.
• Gold added 0.3 percent to $1,285.70 an ounce.

--With assistance from Joanna Ossinger, Andreea Papuc, Samuel Potter, Todd White and Lu Wang.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth

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