Barbara Kollmeyer, and
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U.S. stocks declined on the last trading day of the month, as economic data confirming a U.S. growth rebound and mixed earnings results failed to boost shares.
Even with Friday’s losses, major benchmarks were on track for monthly gains after a slate of better-than-expected earnings reports. The Dow was on track for a monthly gain of more than 2% Friday, while the S&P 500 and Nasdaq were both on pace to rise more than 5% for April.
Notably, while the market itself has performed normally for a strong earnings season, individual companies aren’t being rewarded as much as usual for beating forecasts, Deutsche Bank strategists pointed out in an April 29 note. U.S. companies’ strong quarterly results have prompted Credit Suisse strategist Jonathan Golub to upgrade his year-end target on the S&P 500 by 7%, to 4,600. That implies an increase of nearly 10% from recent levels.
Also on Friday, a series of economic data on prices and personal income came in largely in line with or above expectations. Personal income rose 21% in March, above the expectations for a 20% rise, while personal spending climbed 4.2%, slightly more than expected. The Fed’s favored inflation gauge rose at a pace that was mostly in line with economist forecasts. Treasury yields fell despite the strong data, with the 10-year yield down one basis point, or hundredth of a percentage point, to 1.63%.
The CSI 300 and Hong Kong’s Hang Seng fell by 0.8% and 1.9%, respectively on Friday. Shares of Tencent and JD.com fell after regulators in China said they had summoned companies with online finance services and ordered them to beef up antimonopoly measures. Meanwhile, Chinese lenders such as Postal Savings Bank of China fell, as analysts said growth seemed muted.
Chinese manufacturing and nonmanufacturing purchasing managers indexes showed expansion in April, but well short of expectations, as global chip shortages weighed on manufacturers. A separate private gauge showed activity among smaller manufacturers picking up to its highest monthly level this year. China’s five-day Labor Day holiday begins on Saturday.
Elsewhere, the eurozone economy entered its second technical recession in a year as growth domestic product fell by 0.6% in the first quarter. The Stoxx Europe 600 index closed 0.3% lower, as investors also weighed up a fresh batch of earnings.
A handful of other companies saw their shares fall despite beating earnings forecasts. Western Digital (WDC) slipped 0.9% after better-than-expected financial results. S&P Global (SPGI) stock was down 0.3%, despite beating forecasts for its quarterly earnings and sales.
Clorox (CLX) stock fell 2.6% after reporting quarterly profits that beat estimates and sales that fell short of Wall Street’s projections.
Chevron (CVX) stock fell 3% after reporting a profit of 90 cents a share, meeting forecasts, on slightly better-than-expected sales of $32 billion.
Elsewhere, U.S.-listed shares of AstraZeneca (AZN) climbed 3.8%, after reporting rising revenue and profits in a first quarter that was boosted by sales of its cancer drug. The U.K. drug company said it generated $275 million in sales from the Covid-19 vaccine it has developed with the University of Oxford.