Stocks struggle to stabilize after another volatile ride
U.S. stocks turned higher as financial markets remained volatile amid a spate of mixed earnings and fresh data showing cracks in the housing market. Treasuries fell and the dollar rose.
In Toronto, the S&P/TSX composite index was up 52.90 points to 14,774.65 as of 12 p.m. ET. Manulife Financial shares were trading about 5 per cent higher at $20.84, after the company said new regulations in Saskatchewan that cap the amount insurers have to accept for life insurance policies could help it win an ongoing legal dispute with Mosten Investment that recently attracted the attention of short seller Carson Block.
The S&P 500 Index churned higher, while the Nasdaq 100 Index swung between gains and losses as megacaps from Amazon.com to Microsoft continued to retreat. The broader index is looking to halt an October rout that’s left it on the cusp of a correction. GE swung between gains and losses after sinking to the lowest in nine years on disappointing results. Take-Two Interactive and Under Armour surged on strong earnings, while Chesapeake Energy tumbled on deal news. Facebook reports after the markets close.
U.S. stock investors remain on edge as the S&P 500 hurtles towards its worst monthly performance since the bull market began. Largely stellar earnings have not provided any relief to selling that began amid concern that rising rates will crimp economic growth and lead to a slowdown in corporate profit gains. U.S.-China trade talks are set to be a focus for investors in coming weeks.
President Donald Trump on Tuesday blamed Democrats for what he called a market “pause,” as the party is favored to win control of the House in next week’s midterm election. A week ago, the president blamed the Federal Reserve.
“The largest risks are the trade war and rising rates,” said Michael O’Rourke, JonesTrading’s chief market strategist. “When it comes to the midterm elections, most people are looking at them optimistically in the sense that usually after midterms the stock market rallies. The stock market is going to do what it’s going to do whether you vote Republican or Democrat.”
The Stoxx Europe 600 Index struggled to sustain momentum from Asia -- it opened higher after good earnings for BP and Volkswagen, but corporate results were mixed overall and it swung between gains and losses. The euro edged down after underwhelming economic data.
The MSCI Asia Pacific Index halted a five-day losing streak after Trump held out the possibility of a trade deal with China, even as his administration prepares for a possible expansion of tariffs. China’s stocks climbed as authorities said they’d encourage long-term funds to invest. The yuan was little changed after earlier hitting its weakest against the greenback in a decade.
Elsewhere, 10-year Treasury yields climbed back to 3.10 per cent, while oil dropped below US$67 a barrel in New York.
And these are the main moves in markets:
The S&P 500 Index rose 0.6 per cent at 11:10 a.m. in New York. The Nasdaq 100 added 0.4 per cent. The Dow Jones Industrial Average was higher by 0.9 per cent. The Stoxx Europe 600 Index lost 0.4 per cent. The MSCI Asia Pacific Index increased 0.5 per cent, the first advance in more than a week and the largest climb in almost two weeks. The MSCI Emerging Market Index declined 0.2 per cent, reaching the lowest in almost 20 months on its sixth straight decline.
The Bloomberg Dollar Spot Index climbed 0.1 per cent to the highest in more than 17 months. The euro fell 0.1 per cent to US$1.1359, the weakest in almost 11 weeks. The British pound dipped 0.4 per cent to US$1.2745, the weakest in almost 11 weeks. The Japanese yen sank 0.4 per cent to 112.83 per dollar.
The yield on 10-year Treasuries gained three basis points to 3.11 per cent, the largest climb in almost two weeks. Germany’s 10-year yield rose one basis point to 0.38 per cent. Britain’s 10-year yield climbed one basis point to 1.414 per cent. The spread of Italy’s 10-year bonds over Germany’s rose nine basis points to 3.0453 per centage points.
West Texas Intermediate crude fell 0.9 per cent to US$66.42 a barrel, the lowest in 10 weeks on the largest fall in a week. Gold sank 0.5 per cent to US$1,222.81 an ounce, the weakest in more than a week on the biggest dip in more than three weeks.