Stocks cut gains in choppy trade, Nasdaq rebounds: Markets pull back

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(Bloomberg) – U.S. stocks pared gains in a choppy session as investors weighed the outlook for earnings growth amid potential monetary policy tightening.

The S&P 500 was little changed, while the Nasdaq Composite remained higher, after falling 10% from its November peak. Treasury yields fell across the curve, although the US 10-year is expected to rise above 2%. A dollar gauge fell for the first time in four days.

Global equities had a volatile start to the year, hurt by a more hawkish stance from the Federal Reserve, economic disruption from omicron and risks to corporate earnings from rising costs. Positive earnings from companies such as Morgan Stanley, UnitedHealth Group Inc. and Procter & Gamble Co. helped boost sentiment.

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“Right now you have people waiting to go and redeem. You have a Fed meeting coming up, so there won’t be much movement anywhere until the Fed meeting. the Fed is over,” said Jamie Cox, managing partner at Harris Financial Group. “You look around, there’s not a lot of trouble in the economy, what you have is just the question of ‘is this all on top of a rate hike cycle that’s faster than we plan?’ And I don’t think so. I think it’s not likely.

Earnings optimism and falling buyers rivaled speculation that the Fed could offer an interest rate hike of more than a quarter of a percentage point in March to fight inflation.

On the corporate side, Morgan Stanley rose after raising profitability targets and posting a surprise increase in equity trading revenue, while Bank of America Corp. rose as the bank saw loan growth return with consumers and businesses starting to take on debt again. Results beyond banks also boosted sentiment, with UnitedHealth climbing after beating analysts’ high estimate, and Procter & Gamble advancing after raising its sales outlook.

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“We finally had some good news for banks, but I think the Procter & Gamble report was the most compelling news,” Matt Maley, chief market strategist at Miller Tabak + Co, told Margins. As this was not a problem for PG, it seems to be giving the stock market a bounce today. »

Oil hit a new seven-year high as the International Energy Agency said the market looked tighter than previously thought, with demand holding up at the omicron.

For more market analysis, read our MLIV blog.

What to watch this week:

Netflix is ​​among the companies reporting results during the week in the United States. data includes jobless claims on ThursdayInterest rate rulings due from countries including Indonesia, Malaysia, Norway, Turkey and Ukraine on ThursdayEIA Crude Oil Inventories Report on Thursday

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Some of the major movements in the markets:

Shares

The S&P 500 was little changed at 1:41 p.m. PT The Nasdaq 100 was up 0.3% The Dow Jones Industrial Average was little changed The MSCI World Index was little changed

Currencies

The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.2% to $1.1348 The British pound rose 0.3% to $1.3630 The Japanese yen rose 0, 3% to 114.26 per dollar

Obligations

The yield on 10-year Treasury bills fell four basis points to 1.83%

Merchandise

West Texas Intermediate crude rose 1.4% to $86.59 a barrelGold futures rose 1.6% to $1,842 an ounce

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