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Pioneer Natural surges on report of Exxon takeover talks
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Charles Schwab jumps after report of upbeat client asset
influx
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Semiconductor stocks up; Samsung plans to cut chip output
(Updates to market close)
By Stephen Culp
NEW YORK, April 10 (Reuters) -
U.S. stock indexes clawed back from steep losses to end mixed on Monday as investors digested Friday's employment report and prepared for an eventful week of inflation data and bank earnings.
Megacap momentum stocks dragged the tech-heavy Nasdaq lower, while industrials helped boost the blue-chip Dow into green territory.
The bellwether S&P 500 ended the session nominally higher.
Economically sensitive transports , semiconductors , small-caps and industrials outperformed the
broader market, hinting that the economy is sturdy enough to
withstand further rate increases from the Federal Reserve.
"It’s a go nowhere day," said Sam Stovall, chief
investment strategist of CFRA Research in New York.
"Investors are still convincing themselves that the Fed will raise interest rates by 25 basis points in May which could add to the likelihood of an impending recession. And investor agita is increased ahead of (this week’s) CPI and PPI reports."
According to preliminary data, the S&P 500 gained 3.64 points, or 0.09%, to end at 4,108.66 points, while the Nasdaq Composite lost 6.10 points, or 0.05%, to 12,081.86. The Dow Jones Industrial Average rose 98.43 points, or 0.31%, to 33,583.72. On Friday, a market holiday, the Labor Department released its March jobs report, which showed robust payrolls growth and a welcome but modest wage inflation cool-down. While the report signaled the Fed's restrictive policy is beginning to have its intended economic dampening effect, it raised the odds that the central bank will move forward with another 25 basis point increase to the Fed funds target rate at the conclusion of its May policy meeting. At last glance, financial markets have priced in a 72%likelihood of that happening, according to CME's FedWatch tool.
Recent indicators suggest a softening but sturdy economy,
one that can withstand hawkish Fed policy as the central bank
works to bring inflation closer to its 2% annual target.
"There’s clearly a disconnect between what the Fed is
telling us they’re going to do and what the market believes the
Fed is going to do," said Oliver Pursche, senior vice president
at Wealthspire Advisors, in New York. "When the Fed repeats time
after time what their priorities are and what they’re going to
do, they’re going to do it."
Market participants will pay close attention to the consumer (CPI) and producer (PPI) price indexes, expected on Thursday and Friday, respectively, for a more complete picture on the extent to which inflation cooled in March.
On Friday, a trio of big banks - Citigroup Inc , JPMorgan Chase & Co and Wells Fargo & Co - unofficially kick off first-quarter earnings season, and investors will be scrutinizing the reports for clues on the sector's overall health after two U.S. regional banks collapsed in March.
As of Friday, analysts expected aggregate S&P 500 earnings down 5.2% year-on-year, a stark reversal from the 1.4% annual growth expected at the beginning of the quarter, according to Refinitiv. "Rarely can you injure yourself falling out of a basement window," Stovall added. "Expectations are set so low, the only surprise will be good news."
Shale oil producer Pioneer Natural Resources Co jumped following a report that Exxon Mobil Corp held preliminary talks with the company about a potential acquisition. Charles Schwab Corp advanced in the wake of the broker's reported second-highest ever influx of client assets in March. Chip stocks such as Micron Technology Inc and Western Digital Corp gained on Samsung Electronics Co Ltd's plans to cut chip production. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Inflation ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Stephen Culp; Additional reporting by Sruthi Shankar and Ankika Biswas in Bengaluru, editing by Deepa Babington)
