Stocks Mixed in Choppy Session……

U.S. equities finished mixed and near their lows of the day in a choppy session, accelerating to the downside following comments from President Trump of the possibility of China not honoring its end of the trade deal. Investors continued to eye the ongoing process of reopening economic activity in some U.S. states, while more earnings and economic data showed the disruption of the COVID-19 pandemic. As well, crude oil prices pared a recent rally, and weakness in the financial sector pressured sentiment. Dow member Walt Disney’s positive response to its streaming service offset the negative impact of closures of its theme parks and lack of live sports content, while ADP’s April private sector employment report showed more than 20 million jobs were lost. In other earnings news, GM and Activision Blizzard rose on their quarterly results, though CVS Health and Electronic Arts saw pressure after their reports. The Treasury yield curve continued to steepen and the U.S. dollar gained ground, while gold was lower. Europe finished mixed, while stocks in Asia were mostly higher in a return to action for most markets following holidays.

The Dow Jones Industrial Average declined 218 points (0.9%) to 23,665, the S&P 500 Index shed 20 points (0.7%) to 2,848, while the Nasdaq Composite advanced 45 points (0.5%) to 8,854. In moderately heavy volume, 904 million shares were traded on the NYSE and 3.6 billion shares changed hands on the NASDAQ. WTI crude oil fell $0.57 to $23.99 per barrel and wholesale gasoline lost $0.02 to $0.88 per gallon. Elsewhere, the Bloomberg gold spot price was $15.96 lower at $1,689.96 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.4% to 100.13.

The ADP Employment Change Report showed private sector payrolls fell by 20,236,000 jobs in April, better than the Bloomberg forecast of a 20,550,000 drop, while March’s decrease of 27,000 jobs was revised to a 149,000 fall. Today’s ADP data, which does not include government hiring and firing, comes ahead of Friday’s broader April nonfarm payroll report, expected to show jobs fell by 21,250,000 and private sector payrolls dropped by 21,520,000. The unemployment rate is forecasted to jump to 16.0% from 4.4% and average hourly earnings are projected to rise 0.4% month-over-month (m/m), and be up 3.3% y/y.

The MBA Mortgage Application Index ticked 0.1% higher last week, following the prior week’s 3.3% drop. The modest increase came as a 1.7% decline in the Refinance Index was more than offset by a 5.8% rise for the Purchase Index. The average 30-year mortgage rate declined 3 basis points (bps) to 3.40%.

Treasuries continued to decline on the mid-to-long end of the curve, as the yield on the 2-year note dipped 1 bp to 0.18%, while the yield on the 10-year note rose 5 bps to 0.70% and the 30-year bond rate advanced 7 bps to 1.40%.

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