Stocks Fall as Traders Weigh Earnings; Yields Rise: Markets Wrap

Stocks fell as traders assessed another batch of corporate earnings and remained focused on any signals about the Federal Reserve’s next moves.

(Bloomberg) — Stocks fell as traders assessed another batch of corporate earnings and remained focused on any signals about the Federal Reserve’s next moves.

The S&P 500 halted a two-day advance. Morgan Stanley dropped after reporting a 20% slide in net income amid an investment-banking slowdown. Western Alliance Bancorp climbed after beating earnings estimates and saying deposits recovered. Tesla Inc. fell after the carmaker cut prices again ahead of its results later Wednesday. Bed Bath & Beyond Inc. is laying the groundwork for a bankruptcy filing after the retailer’s last-ditch efforts to raise cash come up short.

“Portfolio managers are trying to reduce risk because of concerns that nothing good can happen after so much central bank tightening,” said Andrew Pease, head of investment strategy at Russell investments Ltd. On earnings, “companies are losing pricing power and a margin squeeze is happening in the background and that’s what to look for when the dust settles on quarter one.”

Treasury two-year yields, which are more sensitive to imminent policy moves, rose for a fifth straight session and topped 4.2%.

Bitcoin dropped back below the closely watched $30,000 level amid a wider retreat in cryptocurrencies.

Oil retreated on concern that slowing economic growth due to tighter monetary policy could further slow an uneven recovery in demand. Gold declined below $2,000 an ounce, under pressure from the strengthening dollar.

Key events this week:

  • China loan prime rates, Thursday
  • Eurozone consumer confidence, Thursday
  • US initial jobless claims, existing home sales, index of leading economic indicators, Thursday
  • ECB issues report on March policy meeting, Thursday
  • Fed’s Christopher Waller speaks at cryptocurrency-focused event, Thursday
  • Fed’s Patrick Harker speaks on “monetary policy and housing”, Thursday
  • Fed’s Loretta Mester discusses the economic and policy outlook, Thursday
  • Fed’s Raphael Bostic discusses regional and national economic conditions, Thursday
  • Fed’s Michelle Bowman and Lorie Logan speak at event, Thursday
  • PMIs for Eurozone, Friday
  • Japan CPI, Friday
  • Fed’s Lisa Cook discusses economic research at an event, Friday

Some of the main moves in the market:

Stocks

  • The S&P 500 fell 0.5% as of 9:30 a.m. New York time
  • The Nasdaq 100 fell 0.8%
  • The Dow Jones Industrial Average fell 0.3%
  • The Stoxx Europe 600 fell 0.2%
  • The MSCI World index fell 0.5%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%
  • The euro fell 0.1% to $1.0956
  • The British pound rose 0.2% to $1.2446
  • The Japanese yen fell 0.2% to 134.36 per dollar

Cryptocurrencies

  • Bitcoin fell 3.8% to $29,265.3
  • Ether fell 5.3% to $1,981.93

Bonds

  • The yield on 10-year Treasuries advanced three basis points to 3.61%
  • Germany’s 10-year yield was little changed at 2.48%
  • Britain’s 10-year yield advanced nine basis points to 3.84%

Commodities

  • West Texas Intermediate crude fell 1.6% to $79.55 a barrel
  • Gold futures fell 1.2% to $1,995.70 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Emily Graffeo.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.