U.S. equities added to yesterday's losses, as uncertainty continued to plague investors ahead of this week's U.K. election and monetary policy decision in Europe, while also contending with gnawing geopolitical uncertainty. However, technology issues continued their rally and energy stocks got a boost amid a rise in crude oil prices. Meanwhile, Treasury yields fell and the U.S. dollar was lower, but gold was higher.
The Dow Jones Industrial Average (DJIA) declined 48 points (0.2%) to 21,136, the S&P 500 Index decreased 7 points (0.3%) to 2,429, and the NASDAQ Composite lost 21 points (0.3%) to 6,275. In moderate volume, 832 million shares were traded on the NYSE and 1.9 billion shares changed hands on the NASDAQ. WTI crude oil rose $0.79 to $48.19 per barrel and wholesale gasoline was $0.01 higher at $1.55 per gallon. Elsewhere, the Bloomberg gold spot price increased $13.59 to $1,293.39 per ounce, and the dollar index, a comparison of the U.S. dollar to six major world currencies, was 0.1% lower at 96.62.
Microchip Technology Inc. (NASDAQ:MCHP $85) raised its Q1 revenue outlook and narrowed its earnings-per-share (EPS) guidance, which came in slightly above the FactSet estimate. The analog and Flash-IP solutions provider said its business for the first two months of the quarter is tracking higher and the increased guidance reflects the strength of its business that it is experiencing. Shares were higher.
Casey's General Stores Inc (NASDAQ:CASY $107) reported fiscal Q4 EPS of $0.76, versus the projected $0.84, as revenues increased 16.6% year-over-year (y/y) to $1.9 billion, roughly in line with estimates. CASY increased its current year same-store sales outlook. Separately, the company announced an 8.3% increase of its quarterly dividend to $0.26 per share. Shares were solidly lower.
Thor Industries Inc (NYSE:THO $104) posted fiscal Q3 profits of $2.11 per share, above the forecasted $1.87, with revenues jumping 56.9% y/y to $2.0 billion, including results from last year's acquisition of Jayco, roughly in line with expectations. The company said it has seen a significant increase in demand for its recreational vehicle (RV) products, amid surging popularity in the general RV lifestyle. Shares rallied nearly 10%.
Hd Supply Holdings Inc. (NASDAQ:HDS $34) announced Q1 EPS of $0.42, or $0.63 ex-items, below the forecasted $0.65, as revenues rose 5.2% y/y to $1.9 billion, roughly in line with forecasts. Gross margins and operating profit came in south of expectations. Separately, the company announced the sale of its Waterworks business to Clayton, Dubilier & Rice for about $2.5 billion in cash and the authorization of up to $500 million in share repurchases. Shares fell sharply.
Job openings jump to record high
The Labor Department's Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, rose to a record high level of 6.04 million jobs available to be filled in April, from March's upwardly revised 5.79 million level, and north of forecasts of 5.75 million. The hiring rate dipped to 3.5% from March's 3.6% pace, while the separation rate declined to 3.4% from 3.6%.
Treasuries were higher, as the yield on the 2-Year note declined 2 basis points (bps) to 1.29%, the yield on the 10-Year note dropped 4 bps to 2.14%, and the 30-Year bond rate fell 3 bps to 2.80%.
Bond yields have been seeing some pressure ahead of this week's U.K. election and monetary policy decision from the European Central Bank (ECB), while the markets continue to grapple with potential Fed policy changes. This comes as next week's Fed monetary policy decision looms and is highly expected to deliver a rate hike, while the potential beginning of the process of the Fed shrinking its bloated balance sheet later this year is also garnering attention.
Tomorrow's economic calendar will be light, with MBA Mortgage Applications expected before the opening bell, while in the final hour of trading, consumer credit will be reported.
Europe mostly lower, Asia mixed as the markets await events later in the week
European equities finished mostly lower, as markets in Germany and Switzerland returned to action following yesterday's holidays, while the global markets awaited this week's election in the U.K. and the ECB monetary policy decision. Polls continue to show a narrowing of the race in the U.K., fostering some uncertainty as Brexit negotiations roll on and votes loom in Germany and Italy later this year.
In economic news, Eurozone retail sales rose by a smaller amount than expected month-over-month, while economic sentiment improved. The euro ticked higher and the British pound was lower versus the U.S. dollar, and bond yields in the region traded mostly to the downside.
Stocks in Asia finished mixed following the slight declines in the U.S. and Europe yesterday as the global markets await this week's U.K. election and monetary policy decision from the ECB, while the Fed is expected to come next week. Geopolitics remained in focus after several countries in the Middle East cut ties with Qatar.
Japanese equities fell, despite a relatively upbeat read on the nation's wage growth, with the yen gaining ground, while markets in Australia dropped in the wake of the expected unchanged monetary policy decision by the Reserve Bank of Australia. Indian securities declined, pulling back from record high territory, but mainland Chinese stocks and those traded in Hong Kong advanced amid improved sentiment in the region, and as the People's Bank of China injected more cash into the market to help alleviate liquidity concerns. Markets in South Korea were closed for a holiday.
For tomorrow, investors can expect the following economic reports from the international front: GDP from Australia, Japan's trade balance and Leading Index, manufacturing orders from Germany, industrial production from Spain, housing prices from the U.K., and retail sales from Italy. In central bank action, the Reserve Bank of India will meet, with no change to its monetary policy expected.