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US stocks open higher after technically led sales




US stocks rose, putting large indices on track to recover some of their losses on Wednesday after selling out sharply in the previous session.

The S&P 500 increased 0.3% and the Dow Jones Industrial Average rose 0.6%. The technology-focused Nasdaq Composite Index rose 0.2%.

On Tuesday, the Nasdaq recorded its biggest one-day decline in one day since September 2020, while the Dow fell more than 800 points as investors digested income reports and weighed in on concerns about inflation, the prospect of a rapid tightening of Federal Reserve policy and the spread of Covid. 19 in China.

Major US stock indices are now down significantly for the year, with the S&P 500 down 12% and the Nasdaq Composite down 20% before Wednesday̵[ads1]7;s session. On Tuesday, the Nasdaq closed at its lowest level since December 2020, erasing the gains it achieved in 2021. The Russell 2000 index for small companies also closed on Tuesday at its lowest level since December 2020.

Investors attributed Wednesday’s rise in US stock futures earlier in the day as a temporary easing. Seema Shah, chief strategist at Principal Global Investors, said she sees that the next steps in the stock market will be either sideways or downwards.

Revenue “supports the market to some degree, but I do not think it is enough to support it higher,” Shah said. She said her team has moved to a neutral recommendation on their overall stock positions.

“The risks just pile up,” she said. “We do not want to pick up an ear in front of the steam drum.”

Many large companies are reporting earnings this week, with results on Wednesday from companies including Facebook parent Meta Platforms and Ford Motor after the closing bell. Twitter, which this week agreed to sell itself for $ 44 billion to Elon Musk, will report on Thursday.

Nearly 80% of the S&P 500 companies that have reported earnings so far have exceeded analysts’ estimates, FactSet data show. Nevertheless, Emily Roland, investment strategist at John Hancock Investment Management, said that investors are still focusing on a number of comprehensive issues that weigh on the markets.

“Markets are mostly focused on some of the macro concerns surrounding aggressively tighter Fed policies, as well as this global growth scare unfolding,” she said.

Many of these concerns have pushed the dollar to its highest level in more than two years. The dollar tends to strengthen as the global economy erupts and as investors expect US growth to surpass the rest of the world. Rising interest rates in the US are also typically in favor of the dollar as higher interest rates attract return-seeking investors to the currency.

The ICE US Dollar Index, which tracks the currency against a basket of others, rose 0.7% to 103.06, as it closed at its highest level since January 2017 and even surpassed the coronavirus-induced market decline in March 2020. Including Wednesday , the index has risen for all but two of April’s 18 trading sessions.

Meanwhile, the euro fell 0.8% against the dollar to around 1.06 dollars, the lowest level since 2017.

In the bond market, the yield on the 10-year US government bond fell to 2.756% on Wednesday from 2.773% on Tuesday. Recently, investors have been selling bonds in anticipation of higher interest rates, and the yield on the benchmark has remained close to the highest level since 2018. Bond yields and prices are reversing.

Natural gas prices in Europe rose by 3.9% to € 107.20 per megawatt-hour, equivalent to $ 113.15, after jumping more than 20% earlier on Wednesday. The measures came after Russia said it would halt gas supplies to Poland and Bulgaria because it refused to pay on Moscow’s new terms.

At the start of New York trading, Tesla added 2.1%, rushing to recover some of its losses after falling 12% on Tuesday, the biggest one-day decline in more than a year. Twitter fell 1.4%, about 9% below $ 54.20 per share price that Elon Musk and Twitter agreed on in the agreement to take the company private.

Microsoft jumped 4.4% after reporting higher revenue and profits on Tuesday in the previous quarter, as demand for cloud services and software continued to rise.

On Tuesday, the Nasdaq Composite recorded its largest one-day percentage decline since September 2020, while the Dow fell more than 800 points.


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Michael Nagle / Zuma Press

Chipotle Mexican Grill increased 4.1% after the burrito chain said total revenue increased 16% last quarter due to higher food, beverage and packaging costs – something the company said was partially offset by increases in menu prices.

Lucid Group received 5.2% after the company said late Tuesday that the government of Saudi Arabia had agreed to buy up to 100,000 vehicles over a 10-year period.

In contrast, Google parent Alphabet fell 4.7% after the technology giant posted lower sales growth due to disruptions in spending on digital ads.

Robinhood Markets fell 3.8% after the online broker said they laid off 9% of their full-time employees. The company will report earnings on Thursday.

In commodities, Brent oil, the international benchmark for oil prices, fell 1.3% to $ 103.26 a barrel.

Abroad, European equities rose, and the Stoxx Europe 600 rose 0.5%. The Swiss chemical company Clariant led the rise for the index, jumping 10% after the company said that an investigation into accounting issues had been completed and that the CFO had decided to resign. Deutsche Bank shares fell 4.7% despite a jump in profits in the first quarter. Warnings about costs and a fall in the key capital buffer ratio worried investors.

Major markets in Asia were mixed, with benchmarks in Japan and South Korea falling more than 1% and Chinese indices rising.

The CSI 300 index for the largest stocks listed in Shanghai and Shenzhen rose 2.9%, recovering some of the recent losses. In Hong Kong, the Hang Seng index was up 0.1%.

The return came after China on Tuesday reported its lowest number of Covid-19 cases in three weeks, and President Xi Jinping emphasized the importance of infrastructure for economic growth, by separating transport, energy and water conservation. Stocks of machinery and building materials rose.

How the largest companies perform

Write to Dave Sebastian at dave.sebastian@wsj.com

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