US stocks edge lower ahead of earnings - RTHK
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US stocks edge lower ahead of earnings

2021-04-07 HKT 04:47
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  • US job openings rose in February to a two-year high as hiring picked up. Photo: Shutterstock
    US job openings rose in February to a two-year high as hiring picked up. Photo: Shutterstock
The S&P 500 slipped on Tuesday but stayed near closing record highs posted in consecutive sessions, as investors weighed more strong US economic data against nervousness about upcoming quarterly earnings reports.

US job openings rose in February to a two-year high while hiring picked up. The data came on the heels of Friday's strong payrolls report and a report on Monday showing activity in the service sector climbed to a record high in March.

The International Monetary Fund raised its global growth forecast to 6 percent this year from 5.5 percent, a rate not seen since the 1970s.

But with an upcoming earnings season expected to show S&P profit growth of 24.2 percent from a year earlier, according to Refintiv data, investors may be waiting to see how strong the results will actually be.

"The big unanswered question is how open the economy is right now and how many people are out there," said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.

"These security prices are reflecting an anticipation that the economy is going to get back to normal sooner rather than later and it is not exactly clear where we are in that process."

The Dow Jones Industrial Average fell 0.29 percent, to 33,430, the S&P 500 lost 0.10 percent, to 4,074 and the Nasdaq Composite dropped 0.05 percent, to 13,698.

The dip came a day after a rally sent the Dow and the S&P 500 to record highs. Investors were assessing the staying power of gains in economically sensitive sectors such as industrials and materials that have been leading the charge higher.

Shares of many economically sensitive companies are classified as value stocks. But growth, which includes many stocks in the technology and communication services sectors, has shown signs of life.

Large US fiscal and monetary stimulus measures and a swift rollout of vaccines have pushed the S&P 500 and Dow to record levels, with the CBOE volatility index retreating to pre-pandemic lows.

Still, some investors remained worried about the possibility of rising inflation and proposals for higher taxes. In addition, other countries continue to have difficulty containing the coronavirus. Canadian Prime Minister Justin Trudeau said on Tuesday the country is facing a very serious third wave. (Reuters)