Wall Street stocks oscillated between modest losses and gains on Wednesday as investors digested the latest results from US banks and streaming giant Netflix.
The S&P 500 closed flat, as did the tech-heavy Nasdaq Composite, which is up 15 percent this year.
Morgan Stanley shares recouped losses, gaining 0.7 percent, despite first-quarter results showing a decline in profits after a slowdown in business activity. Citizens Financial Group rose 0.2 percent after a 5 percent drop in deposits in the first three months of the year, while shares in Western Alliance rose 24 percent after the lender reported a recovery in deposits. The KBW Nasdaq Bank Index rose 1.7 percent.
Meanwhile, Netflix shares fell more than 3 percent after the company reported late Tuesday that it missed analysts’ expectations for subscriber growth.
US stock markets have ticked higher this year despite the failure of three mid-tier lenders in March, although some question how much higher stocks can still rise.
“Despite the moves over the past month, client talk is almost unanimous that they remain bearish,” analysts at JPMorgan said. Meanwhile, the latest Bank of America Fund Managers’ Survey showed that fears of a credit crunch are causing investments in equities relative to bonds to fall to their lowest levels since the Great Financial Crisis.
US Treasuries sold off, with the two-year Treasury yield rising 0.05 percentage point to 4.25 percent, its highest in a month, and the 10-year Treasury yield rising 0.03 percentage point to 3.6 percent.
In Europe, the pan-European Stoxx 600 lost 0.1 percent, while the German Dax rose by the same amount.
Elsewhere, London’s FTSE 100 slipped 0.1 percent after annual UK consumer price growth fell less-than-expected to 10.1 percent last month, down from 10.4 percent in February. Economists had expected a decline to 9.8 percent.
Paul Dales, UK chief economist at Capital Economics, said the March numbers mean “it has become even more likely” that the Bank of England will hike interest rates to 4.5 percent in May. “With this release, we’re even wondering if that won’t be the pinnacle.”
UK government bonds sold off on Wednesday morning, with yields on interest-rate sensitive two-year gilts rising 0.14 percentage points to 3.82 percent – the highest level since late February. Futures markets now expect UK interest rates to peak at 5% in November after pricing in a peak of 4.78% in September.
“It is now clear that Britain has an inflation problem that is worse and more persistent than in Europe and the US,” said Ed Monk, associate director at investment management firm Fidelity International.
Asian stocks fell, with Hong Kong’s Hang Seng index down 1.4 percent and China’s CSI 300 index down 0.9 percent, down from their highest levels since early February.
Oil prices fell, with international benchmark Brent and its US equivalent West Texas Intermediate both falling about 2 percent.
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