Stocks decline after rally to record
Stocks dropped after a rally that drove the equity market to all-time highs. Treasurys climbed, while the dollar fell.
Technology companies led losses in the S&P 500, offsetting gains in retailers. The Dow Jones industrial average and the Nasdaq 100 also retreated. Stocks tied to the Archegos Capital Management crisis whipsawed after Credit Suisse Group AG unloaded more than $2 billion of the shares in the latest block trades stemming from the liquidation of Bill Hwang's fund. ViacomCBS Inc., Vipshop Holdings Ltd. and Farfetch Ltd. bounced after slumping in early trading.
Investors bought stocks in record amounts in the first quarter of 2021 as a combination of generous stimulus and bets on an economic recovery drove $372 billion into global equity funds, according to Bank of America Corp. strategists. The data confirm the bullish market sentiment that has pushed shares to fresh highs, with optimism over vaccination efforts outweighing the fear that higher bond yields can interfere with the rally.
"Stocks' momentum is strong, no doubt about that," said Lindsey Bell, chief investment strategist at Ally Invest. "But the market may be ready to take a breather as investors digest all the good news, determine how much of that is priced in and weigh it against uncertain risks like inflation."
The rally that lifted the S&P 500 above 4,000 for the first time is unusually broad. That's evident from the percentage of the index's component stocks that closed higher than their 200-day moving average, a gauge of price trends. Last week's readings peaked at 94.4%, the highest since January 2010, according to data compiled by Bloomberg. They were the first to surpass 94% since May 2013 and contrasted with levels as low as 3.2% in March 2020.
On the economic front, data showed U.S. job openings rose to a two-year high in February, led by gains in some of the industries hardest hit during the pandemic. The International Monetary Fund upgraded its global growth forecast for the second time in three months, while warning about widening inequality and a divergence between advanced and lesser-developed nations.
These are some of the main moves in markets:
Stocks
- The S&P 500 fell 0.1% as of 4 p.m. EDT.
- The Stoxx Europe 600 Index advanced 0.7%.
- The MSCI Asia Pacific Index gained 0.1%.
Currencies
- The Bloomberg Dollar Spot Index dropped 0.2%.
- The euro gained 0.5% to $1.1868.-
- The Japanese yen appreciated 0.3% to 109.85 per dollar.
Bonds
- The yield on two-year Treasurys declined one basis point to 0.16%.
- The yield on 10-year Treasurys decreased five basis points to 1.65%.
- The yield on 30-year Treasurys fell three basis points to 2.32%.
Commodities
- West Texas Intermediate crude climbed 1.2% to $59.35 a barrel.
- Gold rose 0.8% to $1,741.59 an ounce.
