GLOBAL MARKETS-Wall St indexes split, Treasuries dip amid earnings, geopolitical crosscurrents

BY Reuters | ECONOMIC | 04/19/24 11:23 AM EDT

(Updates to 11:04 EDT)

By Stephen Culp

NEW YORK, April 19 (Reuters) - U.S. stocks were mixed on Friday and Treasury yields dipped on lackluster earnings and uncertainties surrounding central bank policy and geopolitical strife.

Gold and crude prices advanced as market participants kept an uneasy eye on unfolding events in the Middle East.

Of the three major U.S. equity indexes, the Dow was only one firmer. The Nasdaq fell more than the S&P 500, weighed down by megacap tech and tech-related momentum stocks.

The S&P and the Dow were on track for their third straight weekly percentage loss, while the Nasdaq appeared to be headed for its fourth consecutive down week.

"The market lacks conviction in either direction," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. "There's confusion about how the overall health of the economy."

While first-quarter reporting season is still in its early stages, expectations have dimmed. Analysts now see aggregate S&P 500 earnings growth of 2.9% year-on-year, down from the 5.1% estimate as of April 1, according to LSEG.

"Earnings reports so far are very much a mixed bag," Green added. "Most companies are reporting relatively lackluster results and guidance that is somewhat mixed."

Chicago Federal Reserve President Austan Goolsbee said on Friday that the Fed's restrictive policy is "appropriate" given economic strength and the slower-than-expected process of bringing inflation down closer to its 2% target.

"The Fed is, like the rest of us, somewhat struggling with the conflicting data," Green said. "Goolsbee generally tends to be a fiscal dove."

Mounting tensions in the Middle East appeared to plateau after Tehran downplayed Israel's retaliatory drone strike against Iran, a move that seemed geared toward averting regional escalation of the war.

The Dow Jones Industrial Average rose 137.44 points, or 0.36%, to 37,912.82, the S&P 500 lost 16.07 points, or 0.32%, to 4,995.05 and the Nasdaq Composite dropped 151.86 points, or 0.97%, to 15,449.64.

European shares dipped to their lowest level in more than a month as the prospect of Mideast turmoil escalating spooked investors, despite some upbeat earnings results.

The pan-European STOXX 600 index lost 0.13% and MSCI's gauge of stocks across the globe shed 0.45%.

Emerging market stocks lost 1.34%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.59% lower, while Japan's Nikkei lost 2.66%.

Treasury yields inched lower on easing jitters over a potential broadening of the Middle East conflict.

Benchmark 10-year notes last rose 8/32 in price to yield 4.6166%, from 4.647% late on Thursday.

The 30-year bond last rose 14/32 in price to yield 4.7158%, from 4.745% late on Thursday.

The dollar lost ground as currency markets calmed down after a flight to the Swiss Franc and the yen in the wake of Israel's drone attack on Iran.

The dollar index fell 0.22%, with the euro up 0.23% to $1.0667.

The Japanese yen strengthened 0.05% versus the greenback at 154.59 per dollar. Sterling was last trading at $1.2429, down 0.05% on the day.

Crude oil prices dipped earlier as supply concerns eased in the wake of Iran's subdued response, but had recently reversed course.

U.S. crude rose 0.81% to $83.40 per barrel and Brent was last at $87.57, up 0.53% on the day.

Gold advanced, putting the safe-haven metal on track for its fifth straight weekly gain.

Spot gold added 0.7% to $2,393.60 an ounce.

(Reporting by Stephen Culp; Additional reporting by Huw Jones in London; Editing by Richard Chang)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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