International markets roundup

(Australian Associated Press)

NEW YORK – The S&P 500 and the Dow ended the session flat after mixed economic data and retail earnings, while the Nasdaq had another record close with help from technology stocks.

US manufacturing production on Tuesday showed its biggest increase in more than three years in April, bolstering a view that economic growth picked up early in the second quarter despite a surprise decline in homebuilding.

Investors were also cautious about potential delays to the government’s tax and regulation reform agenda after reports late Monday that President Donald Trump disclosed highly classified information to Russia’s foreign minister about a planned Islamic State operation.

“There’s a lot of political data but not a lot of economic data that’s changing the landscape,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Home improvement chain Home Depot reported a better-than-expected first-quarter performance, but TJX Cos Inc , owner of T.J. Maxx and Marshalls stores, posted slowing comparable-store sales growth and a disappointing current-quarter profit forecast.

“It’s a combination of earnings and better-than-expected industrial production, countered with concerns about future economic data and the fact we continue to see weak retail sales,” said Kate Warne, investment strategist at Edward Jones in St. Louis.

“With the consumer being more than two-thirds of economic growth, if consumer spending is weak, can we continue to see solid economic growth?”

The Dow Jones Industrial Average closed down 2.19 points, or 0.01 per cent, to 20,979.75, and the S&P 500 lost 1.65 points, or 0.07 per cent, to 2,400.67, easing from an intraday record high of 2,405.77.

The Nasdaq Composite added 20.20 points, or 0.33 per cent, to 6,169.87, a record close for the index.

Only two of the 11 major S&P 500 sectors closed higher, with technology providing the biggest boost. The sector rose 0.5 per cent, with an outsized boost from Microsoft , which rose two per cent.

Soros Fund Management disclosed late Monday that it more than tripled its stake in Microsoft, which also benefited from investors’ focus on security.

“A lot of technology right now is driven by worries about cyber security, as investors believe more companies will have to upgrade their computer systems,” said Edward Jones’ Warne.

Authorities around the globe scrambled to prevent hackers from spreading the “WannaCry” ransomware that has infected more than 300,000 computers in 150 countries.

Cyber security researchers have found evidence they say could link the attacks to North Korea.

The S&P’s financial sector ended the day with a 0.2-per cent gain. Utilities were the S&P’s biggest decliner of the day with a 0.8-per cent drop.

UnitedHealth and Pfizer were the S&P’s biggest drags.

LONDON – European shares ended little changed on Tuesday as disappointing earnings updates weighed on banks and pharma stocks, but a well-received outlook from Vodafone helped Britain’s FTSE 100 touch a record high.

Germany’s DAX also hit a fresh all-time peak before reversing course to end flat.

The pan-European STOXX 600 index ended little changed, while France’s CAC fell 0.2 per cent.

The FTSE 100 index rose 0.9 per cent, however, buoyed by a near four per cent rise in Vodafone as investors overlooked its 6.1 billion euro ($A9.1 billion) net loss for the year through March and focused instead on its forecast for earnings growth in the current year.

Analysts at Jefferies highlighted Vodafone’s strong cost reduction as supporting its confident dividend growth guidance.

Vodafone lifted Europe’s telecoms sector, which is up 4.8 per cent so far this year but remains among the weakest sectoral performers, and has underperformed a 9.6 per cent gain in the broader STOXX 600 index.

“At the moment it’s a moderate performance by the sector as a whole,” said Ken Odeluga, market analyst at City Index, adding that weakness in BT has weighed on the sector.

Healthcare was weakened by a 6.8 per cent drop in BTG’s shares after the British healthcare firm published its full year figures, disappointing with a slower-than-expected growth forecast.

Likewise disappointing updates also hit shares in budget airline easyJet, lender CYBG and support services firm DCC.

Of the 76 per cent of companies that have reported first-quarter updates, 66 per cent have beaten analysts’ expectations, pointing to earnings growth of around 20 per cent, according to Thomson Reuters I/B/E/S data.

Banking stocks were weak, with UBS down more than two per cent, extending losses from the previous session after Singapore sovereign wealth fund GIC Private Limited cut its stake in the Swiss bank at a loss.

Europe’s energy sector provided support earlier in the session as the oil price rose on expectations of extended supply cuts, before easing to trade flat.

HONG KONG – The Shanghai Composite Index fell 0.4 per cent to 3,078.60 points and Hong Kong’s Hang Seng shed 0.2 per cent to 25,308.29.

Chinese government data showed growth in industrial activity, credit, investment and housing sector activity decelerated in April.

That added to indications growth in the world’s second-largest economy peaked in the first quarter and is declining.

Chinese leaders are tightening access to credit to reduce reliance on debt and investment but April’s downturn was sharper than forecast.

Tokyo’s Nikkei 225 gained 0.2 per cent to 19,902.58 and benchmarks in South Korea, Malaysia, Thailand and the Philippines also rose.

WELLINGTON – The S&P/NZX 50 index fell 22 points or 0.3 per cent to 7407.61.

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