(The Closing Bell will be updated sometime after 4:00 PM CDST to include the latest updates from IBD and Bloomberg Evening Briefing.)
FYI: Accelerating declines in oil prices spilled over into the stock market, dragging major indexes sharply lower. Earlier in the day, a rise in Treasury yields initially had helped boost banks that stand to benefit from a healthier global growth picture and no imminent interest-rate cuts.
Energy stocks in the S&P 500 dropped 1.3%, the worst performers in the broader index, as the price of U.S.-traded crude oil dropped nearly 4% as investors turned more bearish after data Wednesday showed stockpiles surged last week. The Dow Jones Industrial Average fell 122 points, or 0.46%. The S&P 500 lost .21% and the Nasdaq Composite 0..16%.
Domestic crude inventories now stand at the highest since September 2017. While the U.S. is set Thursday night to end its Iran sanction-waivers program and start banning all Iran oil exports, Saudi Arabia has pledged to boost oil output as needed.
Bank stocks were among the few gainers Thursday. Banks’ profitability is hurt by lower rates, but on Wednesday Fed Chairman Jerome Powell at a news conference emphasized a healthier global growth picture, suggesting interest-rate cuts aren’t in the cards soon.
The outlook for healthier economies, along with rate cuts appearing less likely, presented a balanced outlook for markets. Signs that better growth was winning out and encouraging risk-taking were evident in government-bond yields Thursday morning: The 10-year U.S. Treasury yield was 2.547%, up from 2.510% Wednesday.
Regional banks were some of the best performers, and the broad KBW Nasdaq Bank Index added 0.4%.
A reason for their relative cheapness is their steep fall last year: In 2018, financial stocks in the S&P 500 lost 15% compared with the broader index’s 6.2% decline. The financials sector trades at 12 times expected earnings over the next 12 months, the lowest price/earnings ratio of any of the S&P 500 sectors, according to FactSet. The S&P 500 trades at 16.8 times its expected earnings over the next 12 months.
Among individual stock movers, Tesla shares gained 2.1% after the auto maker said it is looking to raise as much as $2.3 billion through a convertible bond sale and public offering of its shares. Typically, when a company announces a stock sale, the company’s stock falls as such an offering tends to cheapen the value of existing shares. However, some analysts have said it is prudent for Tesla to raise money so that it can meet expenses.
Strategists at Bank of America said European equities should catch up more with the performance of U.S. ones, particularly those more immediately exposed to fluctuations in economic growth, known as cyclical stocks. These include banks and car makers and are expected to benefit from improving economic data.
The U.S. dollar, which marginally strengthened late Wednesday, rose further Thursday morning, with the WSJ Dollar Index up 0.03%.
In Asia, the Hang Seng in Hong Kong gained 0.8% and South Korea’s Kospi Index rose 0.4%.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-05-02/your-evening-briefingMarketWatch:
https://www.marketwatch.com/articles/the-dow-fell-122-points-while-tesla-stock-jumped-on-new-bond-issuance-51556831623?mod=marketsWSJ:
https://www.wsj.com/articles/global-stocks-pause-on-fed-outlook-11556784081Bloomberg:
https://www.bloomberg.com/news/articles/2019-05-01/asia-stocks-to-fall-on-fed-remarks-dollar-gains-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-slips-as-tech-earnings-disappoint/CNBC:
https://www.cnbc.com/2019/05/02/stock-market-traders-digest-fed-comments-earnings-and-jobless-data.htmlReuters:
https://www.reuters.com/article/us-usa-stocks/wall-street-inches-higher-with-earnings-in-spotlight-idUSKCN1S80ZPU.K.:
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-flounders-as-miners-exporters-drag-metro-bank-plummets-idUKKCN1S80GVEurope:
https://www.reuters.com/article/us-europe-stocks/european-shares-dip-after-fed-outlook-sap-weighs-idUSKCN1S80IGAsia: (Limited)
https://www.marketwatch.com/story/asian-markets-mixed-after-fed-leaves-rates-steady-2019-05-01/printBonds:
https://www.cnbc.com/2019/05/02/us-bonds-investors-digest-latest-fed-meeting.htmlCurrencies:
https://www.cnbc.com/2019/05/02/forex-market-fed-inflation-outlook-dollar-index-in-focus.htmlOil:
https://www.cnbc.com/2019/05/02/oil-market-us-sanctions-on-iran-venezuela-crisis-in-focus.htmlGold
https://www.cnbc.com/2019/05/02/gold-steady-near-one-week-low-as-fed-clouds-rate-cut-bets.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/futures.ashx 
