Stocks Fall, Bonds Rise After Economic Reports: Markets Wrap

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(Bloomberg) — Stocks fell and bonds rose after data signaled some softening in the labor market, housing and a gauge of business outlook. Traders also continued to wade through corporate earnings while waiting to hear from a raft of Federal Reserve speakers.

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Most major groups in the S&P 500 dropped. The policy-sensitive two-year yield declined as much as nine basis points to 4.16%. The dollar retreated against most of its developed-market peers. Oil slipped as further signs of a US slowdown overshadowed a substantial draw in crude stockpiles.

Recurring unemployment benefit claims jumped to the highest level since November 2021, adding to signs that the labor market is beginning to lose momentum. Sales of previously owned US homes fell in March by more than forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing.

Fed Bank of New York President John Williams said late Wednesday that while the banking sector has stabilized, the recent stress may make it more challenging for households and businesses to access credit.

“If the Fed stays the course, broad financial conditions should continue to tighten, the economy should decelerate into recession, and stocks should trade down sharply,” wrote Chris Senyek of Wolfe Research. “On the flip side, the biggest upside risk to our bearish call remains the Fed backing off way too soon! Although, if the Fed fails to sustainably bring down inflation, the ultimate pain will likely be much worse 12-24 months down the road.”

Corporate Highlights:

Tesla Inc. signaled it will keep cutting prices to stoke demand even after markdowns took a significant toll on profitability.
International Business Machines Corp. gave a forecast for annual revenue in line with analysts’ projections, delivering a cautiously optimistic signal about technology spending in an uncertain economy.
AT&T Inc. missed estimates for free cash flow.
American Express Co. set aside more money to cover souring loans, a move that weighed on earnings.
Blackstone Inc.’s first-quarter profit fell as dealmaking at the world’s largest alternative-asset manager slowed
Bed Bath & Beyond Inc. tumbled as speculation grows that the embattled retailer will soon file for bankruptcy.
D.R. Horton Inc.’s results topped expectations.
Truist Financial Corp. and Fifth Third Bancorp. reported deposits that were broadly stable in the first quarter as banks weathered the fallout from the collapse of three lenders in March.
Union Pacific Corp. posted profit higher than analysts’ expectations amid higher prices.

Read: BlackRock Delivers Stark Warning on US Debt Default: New Economy

Key events this week:

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 0.4% as of 10:44 a.m. New York time
The Nasdaq 100 fell 0.3%
The Dow Jones Industrial Average fell 0.2%
The Stoxx Europe 600 fell 0.1%
The MSCI World index fell 0.2%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.2% to $1.0977
The British pound rose 0.1% to $1.2456
The Japanese yen rose 0.5% to 134.07 per dollar

Cryptocurrencies

Bitcoin fell 1.6% to $28,770.05
Ether fell 0.5% to $1,971.07

Bonds

The yield on 10-year Treasuries declined six basis points to 3.53%
Germany’s 10-year yield declined six basis points to 2.45%
Britain’s 10-year yield declined eight basis points to 3.78%

Commodities

West Texas Intermediate crude fell 2.5% to $77.17 a barrel
Gold futures rose 0.5% to $2,017.30 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Isabelle Lee and Vildana Hajric.

(An earlier version corrected the direction of verbs in the headline.)