(Bloomberg) — U.S equities were mixed Friday, weighed down by big-tech names after disappointing corporate earnings.
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The S&P 500 was little changed and the Nasdaq 100 retreated 0.4% after a warning on ad spending from Snap Inc. wiped out more than $100 billion of market value from the social media company and its peers including Facebook Inc., Google-owner Alphabet Inc., Pinterest Inc. and Twitter Inc.
The company’s warning added to fears of how global supply-chain bottlenecks might trickle down into disparate sectors including tech amid higher cost pressures. A solid start to the corporate earnings season has propelled U.S. stocks to gain for the past three weeks. But with stocks now hovering at all-time highs, traders are bracing for volatility. Intel Corp. also reported lower-than-expected sales amid component shortages.
“A double whammy of bad news for the tech sector could well mean that record highs are out of reach for now,” Fiona Cincotta, senior financial markets analyst at City Index, wrote in a note referring to Snap and Intel results. Yet “despite weakness in tech, overall earnings have been upbeat contributing to the risk-on mood in the market.”
Federal Reserve Chair Jerome Powell is expected to speak in a panel discussion later and investors will be watching for hints on when the central bank might begin tightening monetary policy.
“The market is getting more worried that we are in some kind of a longer term inflation rise. And if so, then it’s thinking that the Fed may have to start to respond,” said Jim Bianco, president and founder of Bianco Research, on Bloomberg TV and Radio’s “Surveillance.” “That’s not a good scenario, because risk markets like stocks won’t like the idea that the Fed has been removed from the situation.”
Richmond Fed President Thomas Barkin said Friday his preference would be to finish tapering asset purchases before looking at rate hikes.
The 10-year U.S. Treasury yield fell to 1.65% but remains higher for the week. The dollar edged lower, on track for a second week of declines. And gold was higher.
Despite the threat of policy tightening and inflation around the world, global stocks are set for a third weekly advance helped by the ongoing recovery from the health crisis. Stocks in Europe gained on Friday, led by consumer shares on positive earnings. Equities in Asia also rose after China Evergrande Group pulled back from the brink of a default, easing concerns about a contagion from the property developer’s woes.
Crude oil gained, Bitcoin fell to $61,500, and Russia’s ruble surged after the country’s central bank raised borrowing costs by more than economists’ expectations.
For more market analysis, read our MLIV blog.
Events to watch this week:
Some of the main moves in markets:
Stocks
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The S&P 500 was little changed as of 10:42 a.m. New York time
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The Nasdaq 100 fell 0.4%
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The Dow Jones Industrial Average rose 0.3%
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The Stoxx Europe 600 rose 0.7%
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The MSCI World index rose 0.1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.2% to $1.1645
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The British pound fell 0.2% to $1.3766
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The Japanese yen rose 0.3% to 113.60 per dollar
Bonds
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The yield on 10-year Treasuries declined five basis points to 1.65%
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Germany’s 10-year yield was little changed at -0.10%
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Britain’s 10-year yield declined four basis points to 1.16%
Commodities
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West Texas Intermediate crude rose 0.4% to $82.87 a barrel
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Gold futures rose 1.7% to $1,811.40 an ounce
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