Stocks advanced ahead of a holiday weekend, with market sentiment divided between two technology initial public offerings and the long-awaited release of special counsel Robert Mueller’s report on Russia’s election meddling.
The S&P 500 (^GSPC) rose 0.16%, or 4.61 points, as of market close, with Industrial stocks outperforming as shares of Honeywell (HON) closed higher by 3.78% on the heels of a strong first-quarter earnings report and guidance.
U.S. equities reversed declines overnight, spurred in part by new data showed Germany’s manufacturing sector contracted for a fourth consecutive month. The euro fell to below $1.13 against the dollar (EURUSD=X), as investors considered the ongoing weakness in a key sector of the eurozone’s largest economy.
IHS Markit’s flash purchasing managers’ index for Germany’s manufacturing sector registered at 44.5 for April— up from March’s reading of 44.1 but below the key level of 50 to indicate contraction. However, activity in Germany’s services sector rose to a seven-month high of 55.6 for the month.
New domestic economic data came in strongly on Thursday, contributing to a bid higher in equities. Retail sales were up 1.6% in March, above consensus estimates for a 1.0% increase, while new unemployment claims unexpectedly fell to 192,000 for the week ending April 13, from 197,000 the week prior.
Politics pulled focus on Thursday as attention turned to the release of the redacted version of Special Counsel Robert Mueller’s final report. The investigation spanned a nearly two-year period, looking into Russian interference in the 2016 presidential election.
The Justice Department published the redacted report Thursday morning.
Attorney General William Barr spoke in a press conference at 9:30 a.m. ET ahead of the release of the report. He reiterated the headline finding released in a synopsis last month that President Donald Trump and members of the Trump administration were not found to have conspired with the Russians. The summary did not meaningfully move markets.
Barr added in the press conference Thursday that Mueller had found “10 episodes” of potential obstruction by Trump. However, he said he and Deputy Attorney General Rod Rosenstein disagreed with some of the legal theories to connect these to obstruction offenses.
Major stock exchanges across the U.S., U.K. and Germany will be closed on Friday in observance of Good Friday. SIFMA also recommended an early closure at 2 p.m. Thursday to trading in U.S. dollar-denominated fixed income securities.
U.S. Treasury yields fell across the curve Thursday afternoon, with the yield on the 10-year Treasury note down 3.2 basis points to 2.56%.
Pinterest and Zoom IPOs
Investors on Thursday greeted the latest set of technology unicorns that began trading on the public markets, following ride-hailing company Lyft’s (LYFT) roller-coaster debut late last month.
Pinterest shares opened at $23.75, or 25% above their IPO pricing of $19.00. Shares closed at $24.45 each, or 28.68% above the IPO price.
Zoom shares opened for trading 80.5% above their IPO pricing at $65.00 apiece. The stock closed higher by 72.22%, to $62.00 per share.
The results of the latest pair of tech public offerings will provide investors with further indications of the potential success – or lack thereof. Other major IPOs expected to come later this year include those of Uber and Palantir.
A strong U.S. equity market and relatively low volatility in the first quarter have provided a solid backdrop for new companies to hit the public markets. However, the tempestuous results of Lyft’s IPO late last month have led to some concern over whether interest in some of this year’s most highly anticipated public offerings is sustainable.
Lyft’s debut was initially greeted by the investment community, with shares priced at its IPO ahead of its originally targeted range. However, enthusiasm quickly cooled after the company’s stock opened for trading, with shares now trading lower by about 19% from its IPO price.
Steep reported losses are central to the concerns for some of the latest companies, especially given Lyft’s $911 million reported net loss last year. Pinterest reported a net loss of $63.0 million in 2018 on $755.9 million in revenue.
Zoom, however, most recently posted a profit, reporting net income of $7.5 million and $330.5 million in revenue for the year ending January 31.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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