Tech leads US stocks turnaround; Europe sags on trade angst

Frankfurt posted the biggest losses among key European markets
AFP

New York (AFP) – Europe’s stock markets slid Tuesday on trade war fears but Wall Street stocks bounced back from the prior session’s rout as tech shares gained.

European markets, in their first session since the Easter holiday break, took their cues from Monday’s US session, when major indices fell sharply on worries about trade and technology sector problems.

But the partial rebound in American stocks, sparked by bargain-hunting, helped lift European bourses off their worst levels, traders said.

“Europe is out of the firing line for Trump’s tariffs for now and has a lower weighting in technology companies compared to the US,” said Jasper Lawler at the London Capital Group. “Both factors make Europe a relative haven from the current negative news flow.”

Besides trade and technology, US investors have also been fixated on the prospect that the Federal Reserve will accelerate its pace of interest rate increases due to inflation. On Tuesday, Fed Governor Lael Brainard warned that valuations in several markets “appear elevated relative to historic norms.”

After major US indices lost about two percent on Monday, US stocks pivoted and finished a volatile session solidly higher. The broad-based S&P 500 gained 1.3 percent.

– Markets need a ‘catalyst’ –

Analysts hope the upcoming earnings period will shake the market out of its current anxiety over trade policy and technology industry problems — though Washington on  Tuesday unveiled a list of $50 billion in Chinese imports that US officials intend to hit with steep tariffs. 

Quincy Krosby, chief market strategist at Prudential Annuities, said that during the next earnings period investors would be looking not only at financial performance but at how executives gauge the odds of a trade war. 

“The market does need a catalyst to regain its footing,” she said. 

Technology companies led the advance, with Tesla Motors surging 6.0 percent after reporting that it reached weekly production of about 2,000 Model 3 sedans at the end of the first quarter — still below its 2,500 target, but “exponentially” better than prior levels, the company said.

Amazon also pushed higher, winning 1.5 percent as investors greeted headlines that suggested President Donald Trump did not plan to follow up a series of irate tweets with concrete action against the company.

Other large technology companies that have been slumping also enjoyed gains, including Facebook, Google parent Alphabet and Intel.

 – Key figures around 2100 GMT –

 

New York – Dow: UP 1.7 percent at 24,033.36 (close)

New York – S&P 500: UP 1.3 percent at 2,614.45 (close)

New York – Nasdaq: UP 1.0 percent at 6,941.28 (close)

London – FTSE 100: DOWN 0.4 percent at 7,030.46 points (close) 

Frankfurt – DAX 30: DOWN 0.8 percent at 12,002.45 (close)

Paris – CAC 40: DOWN 0.3 percent at 5,152.12 (close) 

EURO STOXX 50: DOWN 0.3 percent at 3,351.87 (close)

Tokyo – Nikkei 225: DOWN 0.5 percent at 21,292.29 (close)

Hong Kong – Hang Seng: UP 0.3 percent at 30,180.10 (close)

Shanghai – Composite: DOWN 0.8  percent at 3,136.63 (close) 

Dollar/yen: UP at 106.60 yen from 105.89 yen at 2100 GMT Monday

Euro/dollar: DOWN at $1.2271 from $1.2302 

Pound/dollar: UP at $1.4057 from $1.4044

Oil – Brent North Sea: UP 48 cents at $68.12 per barrel

Oil – West Texas Intermediate: UP 50 cents at $63.51 per barrel 

burs-jmb/dg

.