Most US Stocks Rise Wednesday 04/14 16:15
Most U.S. stocks rose on Wednesday, but indexes petered out to a mixed
finish as momentum weakened following an encouraging start to what's expected
to be a thunderous earnings reporting season.
NEW YORK (AP) -- Most U.S. stocks rose on Wednesday, but indexes petered out
to a mixed finish as momentum weakened following an encouraging start to what's
expected to be a thunderous earnings reporting season.
The S&P 500 fell 16.93 points, or 0.4%, to 4,124.66, a day after returning
to an all-time high. It flipped between small gains and losses several times
through the day.
The Dow Jones Industrial Average rose 53.62 points, or 0.2%, to 33,730.89
after rising above its record set last week earlier in the day. The Nasdaq
composite lost an early gain to drop 138.26, or 1%, to 13,857.84.
The market was held back by drops for several heavyweight tech stocks,
including Apple and Amazon, but the majority of stocks within the S&P 500 rose.
Smaller companies also rallied amid growing optimism as COVID-19 vaccines roll
out and businesses reopen. The Russell 2000 index of small-cap stocks climbed
18.79, or 0.8%, to 2,247.72.
Shares of Coinbase Global, an exchange for bitcoin and other digital
currencies, surged in their market debut, perhaps a defining moment for
cryptocurrencies as they get embraced more by the mainstream.
Its stock opened at $381, after the Nasdaq earlier gave it a $250 reference
price. It quickly rallied toward $430 before closing at $328.28. At that price,
investors say the company is worth more than $85 billion, more valuable than
Nasdaq or Intercontinental Exchange, the owner of the New York Stock Exchange.
Interest in and prices for cryptocurrencies have been exploding recently as
more companies and investors get involved. Coinbase turned a profit last year
after more than reversing a $30.4 million loss from the year before, and it
expects growth to continue because it sees the cryptoeconomy producing "a more
fair, accessible, efficient, and transparent financial system for the internet
Energy stocks were also among the market's strongest on expectations that a
resurgent economy will burn more petroleum products. The International Energy
Agency raised its forecast for oil demand this year, up by 230,000 barrels per
day to 96.7 million. A separate U.S. government report also showed that the
amount of oil supplies in inventories fell sharply last week.
That helped benchmark U.S. crude oil rise $2.97 to settle at $63.15 per
barrel. Brent crude, the international standard, climbed $2.91 to $66.58 a
barrel. Within the S&P 500, Diamondback Energy was one of the top-performing
stocks with a gain of 6%. Occidental Petroleum rose 5.2%.
Much of the market's focus in coming weeks will be on earnings season, as
companies line up to report how much profit they made during the first three
months of 2021. Expectations are very high, and this may be the best quarter of
earnings growth for S&P 500 companies in more than a decade.
Big banks are traditionally among the first companies to report, and Goldman
Sachs, JPMorgan Chase and Wells Fargo all unveiled earnings for the first
quarter that blew past analysts' forecasts. Much of the surge was due to
expectations for a rapidly improving economy, which allowed banks to free up
reserves held in case loans went bad, as well as strong trading revenue.
The better-than-expected results didn't give all the bank stocks a uniform
pop, though. Goldman Sachs rallied 2.3%, but JPMorgan Chase fell 1.9%. Wells
Fargo jumped 5.5%, but only after swerving from an early-morning loss to a gain.
Stocks in recent earnings seasons have been failing to get as big a bounce
as they usually do after reporting better-than-expected results. Analysts say
it's likely a result of how much stock prices have already rallied on
expectations for the strong growth. The S&P 500 has soared roughly 85% since
hitting a bottom in March 2020, even as the pandemic crunched profits for
companies through last year.
Wednesday's encouraging start to earnings season dovetails with several
reports showing the economy is kicking into a higher gear as more widespread
COVID-19 vaccinations and tremendous financial support from the U.S. government
and Federal Reserve work through the system.
The expectations for a stronger economy, though, are also leading to worries
about higher inflation. If inflation were to climb and sustain itself, it could
send bond prices tumbling, erode profits for companies and trigger volatility
across markets worldwide.
A report on Tuesday said that U.S. consumer prices rose more in March than
economists expected, but investors largely took it in stride.
"The market can handle a higher interest rate level if it's coupled with an
improving growth backdrop," said Jack Janasiewicz, portfolio strategist at
Natixis Investment Managers.
Low rates engineered by the Federal Reserve have been one of the central
reasons for the stock market's surge over the last year.
The yield on the 10-year Treasury rose to 1.63% from 1.62%.
Fed Chair Jerome Powell said again on Wednesday that the central bank will
hold off on raising interest rates until the job market has fully healed,
inflation has reached 2% and indications show inflation is on track to stay
moderately above 2% for some time. The Fed also released its latest "Beige
Book" survey, which showed businesses around the country feeling more
optimistic about the economy.