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Asian Markets at Close Report

European Markets at Close Report

May 11, 2017

Asian, Europe & U.S. Stock Markets Closing Reports on may 11, 2017



ASIAN MARKETS


Mark DeCambre


Published: May 10, 2017 11:31 a.m. ET
By
A popular way to bet on energy stocks on Wednesday was on track to see its best one-day climb in two months, as crude-oil prices jumped following an upbeat U.S. inventory report. The exchange-traded Energy Select Sector SPDR ETF XLE, -0.21% was up 1.6% in recent trade, marking its best daily rise since a 2.2% climb March 15, with U.S. crude-oil prices CLM7, +0.04% up 2.8% at $47.15 a barrel in late-morning trade after data from the U.S. Energy Information Administration released on Wednesday showed that domestic crude supplies dropped by 5.2 million barrels for the week ended May 5. Markets have been dogged by concerns about oversupply in the oil industry, which has weighed on investor sentiment and caused a steady retreat in oil prices. A 6% climb in shares of Chesapeake Energy Corp. CHK, -0.52% led the exchange-traded fund's components. The S&P 500's energy sector was the best performer among its 11 sectors. Another popular oil fund, United States Oil Fund LP USO, +0.81% was on track for its best daily gain since Jan. 11. Stocks paring early losses, with the S&P 500 index SPX, -0.22% trading flat at 2,395. The Dow Jones Industrial Average DJIA, -0.11% was being buoyed by blue-chip components Chevron Corp. CVX, -0.27% and Caterpillar Inc. CAT, +0.63% while the technology-laden Nasdaq Composite Index COMP, -0.22% was trading near break-even. The trading action comes in the wake of President Donald Trump's late-Tuesday firing of Federal Bureau of Investigation Director James Comey, which rattled Washington and has cast some doubt on the president's ability to get market-friendly legislation implemented. Oil's recent climb has helped to mitigate some of that early selling pressure.
  • XLE
    -0.14 -0.21%
  • CLM7
    +0.02 +0.04%
  • CHK
    -0.03 -0.52%
  • USO
    +0.08 +0.81%
European Markets
Carla Mozee

European stocks dropped Thursday, pulling back from a 21-month high, with the market coming under pressure as the euro marched higher in the wake of a lackluster economic outlook for the British economy.
The Stoxx Europe 600 index SXXP, -0.52% fell 0.6% to 394.03, hitting intraday lows as investors also saw U.S. stocks SPX, -0.22% DJIA, -0.11%  slide after a round of disappointing earnings reports, including from department store operator Macy’s Inc. M, -17.01%
The pan-European index on Wednesday ended at its highest since August 2015, aided by a stretch higher for oil prices. On Thursday, oil prices CLM7, +0.04% LCON7, +0.02% climbed more than 1%, but that wasn’t enough to lift the Stoxx Europe 600 Oil & Gas index SXEP, -0.30%  into positive territory.
Euro vs. pound: The pound fell against both the euro and the U.S. dollar after the Bank of England trimmed its 2017 economic growth forecast to 1.9% from 2%, and Bank of England Gov. Mark Carney said British consumers are feeling the crunch from the stagnant pace of wage growth along with rising consumer prices.
The central bank left its key rate at 0.25%, with only one of seven board members voting for a rate increase.
“This left sterling in a rather bad mood,” said Connor Campbell, financial analyst at Spreadex, in a note. Sterling GBPUSD, -0.0078%  fell from $1.29 against the dollar, hitting an intraday low of $1.2849, while the euro EURGBP, +0.0475%  climbed 0.5% to 84.38 pence.
“Sterling’s slide did have ramifications elsewhere,” Campbell added, as “the euro’s gains drove the DAX and CAC lower.” A stronger euro can weigh on shares of European exporters, as their goods become more expensive for overseas customers to purchase when the shared currency strengthens.
Germany’s DAX 30 index DAX, -0.36%  closed down 0.4% at 12,711.06, easing from a record closing high on Wednesday. France’s CAC 40 PX1, -0.32% gave up 0.3% to end at 5,383.42.
While a decline in the pound’s value tends to lift shares of multinational companies listed on the FTSE 100, the London benchmark UKX, +0.02%  only eked out a closing gain of less than 2 points at 7,386.63.
The British currency hasn’t traded above $1.30 since early October.
“If we’re going to see sterling move above $1.30 on a sustainable basis, we’ll probably need to see much firmer signs of things like wage growth and output in the U.K. economy than what we have seen,” said Ranko Berich, head of market analysis at Monex Europe, in an interview.
Read: The ECB has 3 big reasons to wind up QE—here’s why it shouldn’t
Movers: Telefonica SA shares TEF, -4.02%  slumped 4%, the worst performing on Spain’s IBEX 35 index. The telecom heavyweight logged a 42% rise in first-quarter net profit. However, quarterly results were slightly below consensus, UBS analysts said in a note.
The IBEX 35 IBEX, -1.57%  gave up 1.6% to close at 10,861.40.
UniCredit shares UCG, +3.67%  bulked up 3.7% after the Italian lender swung to a first-quarter profit of 907 million euros ($986 million), reflecting efforts to clean up its balance sheet. The bank lost more than €13 billion in the fourth quarter.
Meanwhile, Mediobanca SpA MB, +1.27%  picked up 1.3% after the Italian bank notched a 39% rise in profit for the first nine months of the year.
Those gains contributed to a 0.9% rise in the FTSE Italia All-Share Banks index IT8300, +0.86%  that pushed the benchmark to its highest level since March 2016, FactSet data showed.
But the broader Stoxx Europe 600 Bank index FX7, -0.51%  turned lower, ending down 0.5%. French lender Credit Agricole SA ACA, -0.91%  said profit more than tripled to €845 million in the first quarter. But its shares flipped down to close with a 0.9% loss.

US 


Wallace Witkowski, Anora Mahmudova

U.S. equity benchmarks on Thursday closed lower, but well off their worst levels of the session, as a clutch of weaker-than-expected earnings reports and lingering concerns that President Donald Trump’s pro-business agenda may face delays sapped buying appetite.
Particular weakness in the retail sector, with a popular exchange-traded fund that tracks major retailers — the SPDR S&P Retail ETF XRT, -2.70% — off 2.7%, weighed on investor sentiment.
The Nasdaq Composite retreated from a record, as the parent of Snapchat, Snap Inc. SNAP, -21.45% reported a $2.2 billion loss in its first quarter late Wednesday in its first quarter as a publicly traded company, sending shares of the disappearing-message company tumbling more than 21%. The tech-heavy index COMP, -0.22% closed down 13.18 points, or 0.2%, at 6,115.96.
The S&P 500 index SPX, -0.22%  also pulled back from its record close, declining 5.19 points, or 0.2%, to close at 2,394.44, with eight of its 11 main sectors finishing lower. Consumer-discretionary and financial stocks led the decliners.
The Dow Jones Industrial Average DJIA, -0.11%  finished down for a third straight session, shedding 23.69 points, or 0.1%, to close at 20,919.42, after being down as much as 0.7%, or about 145 points, earlier in the session. Microsoft Corp. MSFT, -1.23% and Home Depot Inc. HD, -1.22%  led the losses, finishing down more than 1%.
Higher oil prices failed to support stocks Thursday. U.S. crude prices CLM7, +0.08%  settled up 1.1% at $47.83 a barrel, on the heels of data showing the biggest weekly drawdown for inventory since December, but energy shares were trading nearly flat.
“Both corporate earnings and economic data were pretty good in the first quarter and underpinned the rally so far. But with earnings season almost over, we might see some sideways moves until June when the Fed is likely to raise rates,” said Mark Kepner, managing director of sales and trading at Themis Trading.
Weekly jobless claims fell by 2,000 to 236,000, while continuing claims fell to the lowest level since November 1988. Low levels of layoffs underline a strong labor market. U.S. producer prices showed a broad-based gain in April, making for the largest annual advance in five years.
Kepner noted that very low levels of realized and implied volatility increase the odds of pullbacks in the near term.
The measure of implied volatility on the S&P 500, the CBOE Volatility Index VIX, +3.82%  was up 2.6% at 10.48, hovering near historic lows.
Trump distractions and calling the Fed’s bluff: After the shocking firing of Federal Bureau of Investigation Director James Comey late Tuesday, the stock market’s reaction was fairly sanguine Wednesday, despite questions over whether it would crimp Trump’s ability to push through market-friendly policies. But those questions seem to remain in play. In an interview Thursday, Trump called Comey a “showboat” and a “grandstander” and said he was going to fire him regardless of the Justice Department’s recommendation.
“It’s as simple as, ‘Are we in a better position or in a worse position than yesterday for getting things done?’ and people are reassessing that question,” said Ian Winer, director of equity trading at Wedbush Securities, in an interview.
Joel Kruger, currency strategist at LMAX Exchange, said while politics could factor into stock movements, Federal Reserve policy will likely dictate the direction for equities.
“Conversations about a stock market top are certainly not without merit. But it has also been abundantly clear stocks will only be at risk when the market truly believes the Fed isn’t going to fold its hand when it comes to forward guidance,” Kruger wrote in emailed comments.
“We may be getting close to that point, but until then, investors will keep pushing their bets and calling the Fed’s bluff,” he said.
Early Thursday, New York Fed President William Dudley said trade protectionism is a “dead end” that will eventually harm the U.S. economy, Reuters reported. The comments, in a speech in Mumbai, India, on the benefits and challenges of globalization, were seen as implied criticism of Trump’s policies, even though Dudley didn’t mention the president by name.
Stock movers: Shares of Macy’s Inc. M, -17.01%  finished down 17% after the retailer reported a worse-than-expected slide in revenue in the first quarter. Shares of other traditional retailers dropped with Nordstrom Inc. JWN, -7.60%  closing down 7.6% and Kohl’s Corp. KSS, -7.84%  down 7.8%.
Straight Path Communications Inc. STRP, -20.41% shares sank 20% after the company confirmed an agreement to be bought by Verizon Communications Inc. VZ, -0.78% in a deal that values Straight Path at a deep discount to Wednesday’s closing price.
Whole Foods Market Inc. WFM, +2.15%  rose 2.2% after the grocery-store chain announced a new stock buyback plan and released earnings that met forecasts.
Valeant Pharmaceuticals International Inc. VRX, +8.83%  shares closed up 8.8% following favorable developments in patent litigation over its drug Xifaxan.
Nvidia Corp. NVDA, +4.30%  shares closed up 4.3% at a record $126.50.
Other markets: Asian markets ADOW, +0.00%  finished higher, with China SHCOMP, +0.29%  squeezing out a gain of 0.1% as investors fretted over liquidity worries. European stocks SXXP, -0.52%  finished lower while the FTSE 100 UKX, +0.02%  rose fractionally.
Read: Italian banks a bright spot as European stocks fall back
Gold prices GCM7, +0.09%  settled up 0.4% at $1,224.20 an ounce as the U.S. Dollar index DXY, -0.02%  was flat.
The yield on a 10-year Treasury note TMUBMUSD10Y, -0.22%  inched 2 basis points lower to 2.392%.
—Barbara Kollmeyer in Madrid contributed to this article.