Stocks decline, dollar Strengthens Most in 3 Weeks
U.S. stocks fell for the first time in three days as investors digested mixed corporate earnings and worsening economic data. The dollar strengthened the most in about three weeks and Treasury yields increased.
The S&P 500 and Dow Jones Industrial Average indexes closed lower, while information technology and consumer discretionary sectors kept the Nasdaq Composite in the green as investors continued to bet Apple and Microsoft will perform well in the stay-home world. A report showed U.S. companies cut a record 20.2 million jobs in April. The Stoxx Europe 600 Index slumped.
"This pandemic has systemically changed the way we live and work," said Mike Loewengart, managing director of investment strategy at ETrade. "If these job losses end up being permanent, that's a horse of a different color due to the negative effect it will have on spending and the economy."
After the close of regular trading, Lyft reported moderate growth of the ride-hailing business in a quarter marred by the effects of the coronavirus pandemic.
Yields on 10-year Treasuries rose the most in a week, with the U.S. increasing the amount of debt it plans to issue in quarterly refunding auctions to a record high of $96 billion to provide government funding as the economy heads into a recession.
Bonds declined in the euro region as investors fretted over Tuesday's German court ruling criticizing the European Central Bank's easing measures. The euro weakened amid a slew of bleak economic forecasts by the European Union, heading toward its lowest close since mid-March, back when markets were roiled by demand for the U.S. currency. West Texas oil retreated after a rally that had doubled prices in the past five days.
President Donald Trump said Tuesday that Americans should begin returning to their everyday lives even if it leads to more sickness and death. Meanwhile, data from Germany provided further evidence of the pandemic's devastating effect, as new cases in the euro area's biggest economy rose ahead of talks on easing restrictions. Traders may have seen a glimmer of hope in earnings from drug makers and online grocers, though insurers, banks and carmakers added to the chorus of companies taking a heavy hit.
"One thing is for sure is that this pandemic health crisis has produced depression-magnitude job losses which means this recovery is going to take longer than many are thinking," said Chris Rupkey, chief financial economist for MUFG Union Bank.
Elsewhere, shares in Shanghai rose as Chinese traders came back online after a five-day break. Australian equities fell, while Hong Kong and Korean benchmarks advanced. Japanese markets were shut for a public holiday.
The Bank of England has a policy decision on Thursday.
Friday brings the U.S. jobs report for April, expected to show a severe impact from the pandemic. The median forecast in a Bloomberg survey of economists calls for a 21 million plunge in payrolls.
