Tech shares pare losses; dollar higher on Powell

Bloomberg

US technology shares pared losses as investors downplayed the impact of Netflix’s disappointing subscriber growth for the rest of the FAANG stocks. The dollar strengthened as
Federal Reserve Chairman Jerome Powell made the case for further tightening.
The Nasdaq 100 climbed from its lows as Facebook turned positive and Broadcom and Nvidia rallied.
The S&P 500 was little changed, while the Dow Jones Industrial Average edged lower. Results from Goldman Sachs narrowly beat investor expectations, while trading revenue
disappointed. On the Stoxx
Europe 600 Index, gains in mining and chemicals shares were outweighed by declines in telecommunications and household goods.
“We’ll see if this is a one-off in the pantheon of big tech names, or if this is a harbinger of weaker guidance,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “Most likely not though, this sets the stage for the market to
continue to be selective.”
Earnings and US monetary policy have become the main drivers of market sentiment this week. That’s giving respite from a backdrop of worsening trade relations between the world’s biggest economic powers. Company results have been mixed thus far, with Deutsche Bank AG and Bank of America Corp. beating estimates, counterbalancing the Netflix reading.
Powell said on Tuesday in statement to the Senate Banking Committee that the central bank will continue to gradually raise interest rates “for now’’ to keep inflation near target amid a strong US labour market.
Commodities climbed after falling to the lowest in 11 months as crude traded in New York steadied at about $68 a barrel. Emerging market stocks headed lower for a second day. The New Zealand dollar jumped after the central bank’s core inflation measure accelerated at the fastest pace in seven years.
Earnings season continues, with reports due from companies including: Morgan Stanley, American Express, Microsoft, Taiwan Semiconductor Manufacturing, Unilever and IBM. Fed’s Powell delivers the semi-annual Monetary Policy Report to a Senate committee Tuesday and a House panel on Wednesday, and will answer lawmakers’ questions. Euro-zone inflation data for June is expected on Wednesday to show the annual rate inched higher to 2 percent.
The S&P 500 Index rose
0.1 percent in New York. The Dow Jones Industrial Average dropped 0.1 percent.
The Nasdaq Composite Index gained less than 0.1 percent. The UK’s FTSE 100 Index dropped 0.1 percent. The MSCI Emerging Market Index slumped 0.3 percent. The Stoxx Europe 600 Index fell 0.2 percent.
The Bloomberg Dollar Spot Index rose 0.3 percent, the first increase in four days. The euro slipped 0.2 percent to $1.1694. The British pound dropped 0.6 percent to $1.3161.
The Japanese yen weakened 0.3 percent to 112.66 per dollar. South Africa’s rand fell 0.3 percent to 13.26 per dollar.
The yield on 10-year Treasuries fell less than one basis points to 2.85 percent. Italian 10-year yields fell 11 basis points to 2.47 percent. Germany’s 10-year yield fell one basis point to
0.35 percent.