Stocks Are Lower as Global Covid Cases Hit New Highs



Stocks Decline as Traders Wade Through Earnings: Markets Wrap

(Bloomberg) — U.S. stocks were on pace for their first back-to-back drop since late March as investors sifted through a batch of corporate results.The equity pullback was more pronounced in smaller companies, with the Russell 2000 sinking almost three times as much as the S&P 500. United Airlines Holdings Inc. paced a selloff in travel stocks on a bigger-than-expected loss. International Business Machines Corp. climbed after reporting its largest revenue growth in 11 quarters. Netflix Inc.’s results later Tuesday may show whether the streaming giant can manage expectations as Wall Street projects a steep slide in its most closely watched metric.Other corporate highlights:Johnson & Johnson posted stronger-than-expected sales, while Travelers Cos.’s earnings beat estimates and Philip Morris International Inc. raised its outlookProcter & Gamble Co. is boosting the prices of some consumer products as the household-goods behemoth grapples with higher commodity costsWhile American equities are trading at a valuation that’s about 35% above the average of the past decade, investors are focused on what’s forecast to be the best earnings season in two years. One of their biggest concerns is whether companies are equipped to handle mounting inflation pressures as the economic recovery gains momentum.“Earnings season is ramping up, and there’s this concern about how the multinationals will give their guidance in view of the fact that we haven’t drawn a line under Covid yet,” said Fiona Cincotta, senior financial markets analyst at City Index. “That is just starting to unnerve investors. Demand for riskier assets has come off.”For David Donabedian, chief investment officer at CIBC Private Wealth Management, the stock market has been just taking a breather after a big rally, but there are still reasons to be bullish.“The economic recovery has taken hold, the earnings recovery has taken hold, everything we’ve seen from first-quarter earnings so far has been that it’s going to be a blowout quarter,” he said.Here are some key events to watch this week:EIA crude oil inventory report on Wednesday.European Central Bank rate decision and President Christine Lagarde briefing on Thursday.U.S. releases new home sales data Friday.These are some of the main moves in markets:StocksThe S&P 500 fell 0.7% as of 12:34 p.m. New York timeThe Nasdaq 100 fell 0.8%The Dow Jones Industrial Average fell 0.7%The Russell 2000 Index fell 2%The MSCI World index fell 0.9%CurrenciesThe Bloomberg Dollar Spot Index was unchangedThe euro was little changed at 1.2038The British pound fell 0.2% to 1.3952The Japanese yen was little changed at 108.08 per dollarBondsThe yield on 10-year Treasuries fell four basis points to 1.564%Germany’s 10-year yield fell three basis points to -0.262%Britain’s 10-year yield fell two basis points to 0.731%CommoditiesWest Texas Intermediate crude fell 1.4% to $ 63 a barrelGold futures rose 0.5% to $ 1,779 an ounceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.