What you need to know…

The S&P 500 Index ($SPX) (SPY) Friday closed up +0.09%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.11%.

Stock indexes Friday fluctuated between modest gains and losses and finally settled slightly higher.  Uneven corporate earnings results Friday led to some choppy trading.  An increase in T-note yields Friday undercut stocks.  T-note yields rose after a gauge of U.S manufacturing activity unexpectedly expanded by the most in 6 months. 

Stock market optimism has improved as Bloomberg data showed more than $12.6 billion had been sent to equity exchange-traded funds so far this month, the largest influx since January and more than twice the rate of February and March.  Recent concerns leading to equity outflows have included concern about higher interest rates and a recession, and the recent banking crisis events.

Global bond yields Friday were mixed.  The 10-year T-note yield rose +3.8 bp to 3.570%.  The 10-year German bund yield rose +3.6 bp to 2.481%. The 10-year UK gilt yield fell -0.9 bp to 3.758%.  The markets are showing an 88% chance of a 25 bp rate hike by the Federal Reserve at the May 2-3 FOMC meeting and have fully priced in a 25 bp rate hike by the ECB at its May 4 ECB meeting.

The Apr S&P U.S. manufacturing PMI unexpectedly rose +1.2 to 50.4, stronger than expectations of a decline to 49.0 and its strongest pace of expansion in 6 months.

On the positive side for stocks, healthcare service stocks rallied, led by a +3% gain in HCA Healthcare after it reported better-than-expected Q1 EPS and raised guidance on full-year EPS.  Also, Procter & Gamble closed up more than +3% after reporting stronger-than-expected Q3 net sales and raising its full-year organic revenue forecast.  In addition, CSX closed up more than +3% after reporting Q1 revenue above consensus. 

On the bearish side, Albemarle closed down -10% after Chile’s government unveiled plans where the state will partner with companies in lithium mining projects, giving the government a majority stake in all new contracts.  Also, WR Berkley closed down more than -9% after reporting Q1 adjusted operating EPS below consensus.  In addition, a slump in regional bank stocks on Friday weighed on the overall market. 

Overseas stock markets Friday settled mixed.  The Euro Stoxx 50 closed up +0.54%.  China’s Shanghai Composite closed down -1.95%, and Japan’s Nikkei Stock Index closed down -0.33%. 

Today’s stock movers…

Healthcare service stocks rallied Friday, led by HCA Healthcare (HCA), which closed up more than +3% after reporting Q1 EPS of $4.85, stronger than the consensus of $4.14, and raising guidance on full-year EPS to $17.25-$18.55 from a  previous projection of $16.40-$17.60.  Also, Community Health Systems (CYH) closed up more than +15%, Tenet Healthcare (THC) closed up more than +4%, and Universal Health Services (UHS) closed up more than +2%. 

Procter & Gamble (PG) closed up more than +3% to lead gainers in the Dow Jones Industrials after reporting Q3 net sales of $20.07 billion, above the consensus of $19.34 billion and raised its full-year organic revenue forecast to up +6% from a prior view of up +4-5%, stronger than the consensus of +5.39%. 

CSX (CSX) closed up more than +3% to lead gainers in the Nasdaq 100 after reporting Q1 revenue of $3.71 billion, above the consensus of $3.59 billion.

Amazon.com (AMZN) closed up more than +3% after the company announced it would eliminate hundreds of corporate jobs as part of a reorganization.

AT&T (T) closed up more than +3% after HSBC upgraded the stock to buy from hold with a price target of $21. 

Pool Corp (POOL) closed up more than +3% after Stephens upgraded the stock to overweight from equal weight, saying a return to top-line growth in the second half of the year is “quite possible.”

Medtronic Plc (MDT) closed up more than +2% after the FDA approved the company’s MiniMed 780G insulin pump system for modifications to the SmartGuard Technology and for expanding the indications for use to include the Guardian 4 Sensor.

Albemarle (ALB) closed down -10% to lead losers in the S&P 500 after Chile’s government unveiled plans where the state will partner with companies in lithium mining projects, giving the government a majority stake in all new contracts.

W R Berkley (WRB) closed down more than -9% after reporting Q1 adjusted operating EPS of $1.00, below the consensus of $1.23.

A slump in regional bank stocks Friday weighed on the overall market.  Truist Financial (TFC) and Zions Bancorp (ZION) closed down more than -5%. Also, Comerica (CMA) closed down more than -4%, and KeyCorp (KEY), Regions Financial (RF), and US Bancorp (USB) closed down more than -3%.

Autoliv (ALV) closed down more than -5% after reporting Q1 adjusted EPS of 90 cents, weaker than the consensus of 92 cents. 

Schlumberger (SLB) closed down more than -4% after reporting Q1 cash flow from operations of $330 million, well below the consensus of $660.8 million.

Freeport-McMoRan (FCX) closed down more than -4% after iron ore prices fell to a 4-month low and copper prices fell to a 1-week low.

Boston Scientific (BSX) closed down more than -2% after Bloomberg reported the company is exploring a potential deal for Shockwave, a manufacturer of medical devices.

Across the markets…

June 10-year T-notes (ZNM23) on Friday closed down -6 ticks, and the 10-year T-note yield rose by +3.8 bp to 3.570%.  June T-notes Friday erased an early advance and turned lower after U.S. economic news showed the Apr S&P U.S. manufacturing PMI unexpectedly expanded at its strongest pace in 6 months. T-note prices were also undercut by negative carryover from a slide in European government bond prices on hawkish ECB comments.

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