By Geoffrey Smith
Investing.com — U.S. stock markets opened slightly lower on Tuesday, consolidating after their surge to new all-time highs on Monday on optimism about the economic recovery.
The market is still basking in the afterglow of the March employment report on Friday, which showed that employment in the key services sector roared back as states across the country started to relax their restrictions on businesses and on social gatherings. The survey showed that 916,000 jobs were created through mid-March, with February’s number also being revised up by nearly 80,000. There was more good news from the labor market on Tuesday as the JOLTS job opening survey showed the highest number of vacancies since May, at over 7.36 million.
Sentiment was underpinned by a firm bond market, which was reassured about any potential inflationary threat by a clear slowdown in average weekly wages in the report. The slowdown was in large part due to the preponderance of lower-paid services workers rejoining the workforce. The 10-Year U.S. Treasury yield stayed resolutely below 1.70% in response, having traded as high as 1.77% in recent weeks. Inflationary concerns were also eased by the sharp drop in oil prices, after OPEC and its allies sketched out plans to raise output by as much as 2 million barrels a day by the end of the quarter.
The rally in oil over recent months has had a salutary effect on the balance sheet of Big Oil: BP ADRs (NYSE:BP) rose 4.8% after the company said it will resume buybacks almost a year ahead of schedule after reaching its net debt target faster than expected. The improved outlook has allowed it to realize a suite of asset sales in good time.
Among individual stocks, there were few egregious moves. Snap (NYSE:SNAP), the parent company of Snapchat, was one exception, rising 6.8% to a three-week high after Atlantic Securities upgraded its recommendation to ‘overweight’. Atlantic was convinced by the company’s strategy of transitioning into a broader content provider.
Tesla (NASDAQ:TSLA) stock fell 1.2% after the market’s enthusiasm for its quarterly deliveries number cooled a bit – even though it remained some 12% higher than its level before the numbers. Tesla had reported better-than-expected sales volumes for the three months through March at the weekend, but some fretted that the sales mix was skewed toward its lower margin Model 3 product.
Wall Street Opens Lower, Consolidating After Monday Surge; Dow Down 50 Pts
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