S&P 500 Pares Gains Into the Close as Nasdaq Drops: Markets Wrap

(Bloomberg) — Stocks almost wiped out their advance as a drop in technology and retail shares dragged down the Nasdaq 100. Treasuries retreated. Oil climbed.

The S&P 500 closed with a small gain following its biggest two-day rally in almost three months. Energy and financial shares outpaced tech even after Google’s parent Alphabet Inc. hit a record on stellar results, while Amazon.com Inc. slumped. Banks climbed as JPMorgan Chase & Co. and Morgan Stanley issued bullish calls on the industry. GameStop Corp., the poster child for Redditors looking to squeeze short sellers, and movie-theater chain AMC Entertainment Holdings Inc. rebounded following Tuesday’s plunge.

After the close of regular trading, Qualcomm Inc. slumped as the biggest maker of chips that connect smartphones to wireless networks reported disappointing revenue. EBay Inc. climbed as profit topped Wall Street estimates.

Read: SEC Hunts for Fraud in Social-Media Posts Hyping GameStop

A widely watched segment of the Treasury yield curve reached its steepest level in almost five years even as the U.S. decided not to increase auction sizes for long-maturity notes and bonds at next week’s quarterly refunding sales. Data showed companies added more jobs than forecast in January, while growth at service providers accelerated. The scattered signs of a pickup in activity come as President Joe Biden tries to win congressional passage of a $1.9 trillion stimulus proposal. Federal Reserve Bank of St. Louis President James Bullard said stock prices reflect optimism about the economic recovery.

“There has been a ton of noise in the stock market these past few weeks, so it’s encouraging to see solid economic reads,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial Corp. “There may be signs of overextension when it comes to single stocks, but under the surface there is an economy regaining serious momentum.”

Normalcy has yet to return to the Cboe Volatility Index even after its biggest two-day decline in about three years. Tuesday’s close was 31% higher than the average since VIX calculations began in 1990, according to data compiled by Bloomberg. There hasn’t been a below-average close in about a year. VIX futures are indicating that “volatility will remain elevated for many months,” Nicholas Colas, co-founder of DataTrek Research LLC, wrote Tuesday in a report.

Elsewhere, crude climbed as OPEC+ said it will keep pushing to quickly clear the oil surplus left behind by the pandemic — a bullish signal for prices that have already surged to a one-year high.

These are some key events coming up:

The Bank of England sets rates on Thursday and an Indian central bank policy decision is due Friday.The U.S. January payrolls report is due Friday, providing a first look at hiring in 2021.

These are some of the main moves in markets:

Stocks

The S&P 500 advanced 0.1% at 4 p.m. New York time.The Stoxx Europe 600 Index climbed 0.3%.The MSCI Asia Pacific Index increased 1.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro dipped 0.1% to $1.2035.The Japanese yen was little changed at 105.02 per dollar.

Bonds

The yield on 10-year Treasuries rose three basis points to 1.13%.Germany’s 10-year yield climbed three basis points to -0.46%.Britain’s 10-year yield jumped two basis points to 0.371%.

Commodities

West Texas Intermediate crude increased 2% to $55.85 a barrel.Gold lost 0.2% to $1,833.85 an ounce.Silver rose 0.6% to $26.83 per ounce.

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