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Stocks move lower, still head for 3rd straight monthly gain

FILE – In this March 23, 2021 file photo, pedestrians walk past the New York Stock Exchange in New York’s Financial District. Stocks are pulling back in the early going on Wall Street, easing the S&P 500 below the record high it set a day earlier. The index is still on track to close out its third solid monthly gain in a row. It was down 0.5% in the first few minutes of trading Friday, April 30, and technology and communications stocks were doing the most damage. (AP Photo/Mary Altaffer, File)

By DAMIAN J. TROISE and ALEX VEIGA: Stocks fell broadly in afternoon trading Friday as investors backed away from technology and communications companies.

Despite the decline, the market is on pace for its best month so far this year, as investors remain optimistic that the pandemic is slowly and steadily coming to a close.

The S&P 500 was down 0.7% as of 2:56 p.m. Eastern. The Dow Jones Industrial Average fell 194 points, or 0.6%, to 33,867 and the Nasdaq was down 0.8%. The S&P 500 is on pace for a modest weekly gain.

The S&P 500 is up 5.3% in April, on track for its best month since November 2020, when President Joe Biden was elected. Under Biden, the Dow notched its best first 100 days under a new president since Franklin Delano Roosevelt took office in 1933, according to LPL Financial, with a 9.9% return as of April 29. The Dow delivered a 6.1% return during former President Donald Trump’s first 100 days in office.

The gains have come as large-scale coronavirus vaccination programs help people return to jobs and normal behaviors after more than a year of restrictions.

The Commerce Department said Thursday that the U.S. economy grew at a brisk 6.4% annual rate in the last quarter and is likely to accelerate further as more vaccinations are administered and COVID-19 cases continue to fall.

“The broad story is one of case counts on the whole being lowered across the majority of the world and vaccines ramping up generally across the world and that’s getting us back to normal,” said Jason Pride, chief investment officer of private wealth at Glenmede. There’s also the trillions of dollars in government support that has gone out to help the U.S. economy recover from the pandemic. The Commerce Department said U.S. household incomes surged 21% last month, driven largely by the $1,400 payments that went out to most Americans as part of President Biden’s economic package. Consumer spending rose at the fastest pace in nine months.

The Biden administration is also pushing for more infrastructure spending to help further boost the economy. The big policy and spending proposals have investors looking further up the road to what a “new normal” looks like after the pandemic, Pride said.

The market still has some key concerns, including how government spending will impact taxes and inflation. To pay for his plans, Biden has proposed to nearly double the tax rate that Americans who make more than $1 million in a year pay on profits from stocks and other investments. The president also wants to impose a 21% minimum tax on corporations’ foreign earnings in a bid to stop companies from stashing profits in countries with low tax rates.

Treasury yields have stabilized after jumping earlier this year as concerns about inflation rose. The yield on the 10-year Treasury slipped to 1.63% from 1.64% late Thursday, and was down from 1.68% at the start of the month. Analysts still expects yields to rise again.

“The longer term trend in yields has turned higher,” said Willie Delwiche, investment strategist at All Star Charts. “We need to see German and Japanese yields move higher as well if U.S. Treasury yields are going to resume their ascent.”

Investors have also gotten strong corporate earnings which have helped justify higher stock prices. Amazon rose 0.5% after the e-commerce giant reported that its profits more than tripled in the latest quarter. More than half of the companies in the S&P 500 have reported their results, which show earnings growth of 54% percent so far for index, according to FactSet.

Investors will get another big dose of earnings reports to start off May, including results from drugmakers Eli Lilly, Merck as well as Pepsi, Colgate-Palmolive, the railroad CSX and drugstore giant CVS. Investors will also get April’s jobs report next week.

For Indian tourists travelling by land:- 72 hours (-ve) C-19 report, CCMC form and Antigen Test at entry point

For Indian tourists travelling by land:- 72 hours (-ve) C-19 report, CCMC form and Antigen Test at entry point

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