US tech stocks rally as Alphabet gets to keep Chrome; bond market groans subside
Clutch of NZX50 heavyweights shed rights to their dividends.
Alphabet led a rally among US tech stocks after the Google-parent was allowed to keep its Chrome browser and its partnership with iPhone maker Apple in a much-anticipated antitrust ruling, with judge Amit Mehta ordering the search engine giant share search results and data with its rivals.
The Nasdaq Composite advanced and the S&P 500 kept its head in positive territory, while the Dow Jones Industrial Average was on the red side of the ledger, with Chevron leading the blue-chip index lower as oil giants including Shell and BP followed the decline in oil prices.
Meanwhile, bonds clawed back some of yesterday’s losses when long-dated government yields climbed to multi-year highs as softer US jobs figures underpinned expectations for a rate cut from the Federal Reserve.
And in New Zealand, the S&P/NZX 50 index may come under pressure with six companies shedding rights to their dividends, including heavyweights Ebos Group and Meridian Energy, while Australian media reported Vista Group International’s one-time agitating shareholder Potentia Capital tapped Jarden to sell its 19% stake in the cinema analytics firm.
Reading the fine print
Alphabet climbed 8.2% in late trading in the US as investors welcomed a less-punishing antitrust ruling than feared with the search engine giant ordered to share information and search results with its rivals over a long-running case where it was deemed to be a monopolist.
Judge Amit Mehta in the US District Court of Columbia put restrictions on the payments Google uses to get prime placement on smartphones such as Apple’s iPhone, but didn’t ban them entirely, nor did he agree with the government’s request to force the divestment of the Chrome browser. Apple rose 3.1%.
Meanwhile, the Wall Street Journal reported xAI’s chief financial officer Mike Liberatore resigned in July, the latest in a string of executive departures at the artificial intelligence firm.
The S&P 500 edged up 0.1%, while the tech-heavy Nasdaq gained 0.5% in late trading.
The Dow Jones Industrial Average was down 0.6% in late trading, with Chevron leading the blue-chip index lower, joining energy giants Shell and BP lower as oil prices came off the boil. Brent crude oil futures dipped 0.2% to US$67.49 a barrel at 7am in Auckland.
Bond market groans
The tech rally was supported by a recovery in bond markets as long-dated government bond yields eased from multi-year highs after soft US jobs data reaffirmed expectations for the Federal Reserve to cut interest rates. Non-farm payrolls figures due on Friday are the main data event for the week.
“The recovery halted a bond market slide which has seen borrowing costs in some big economies reach the highest levels in years,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Prior to the data, 30-year Japanese government bond yields had reached a record high of 3.29% and 30-year UK gilts yields increased to 5.75%, the highest level in more than 25 years.”
Across the Atlantic, stock markets were stronger with the UK’s FTSE 100 index gaining 0.7%, Germany’s DAX 30 up 0.5% and France’s CAC 40 advancing 0.9%, with healthcare and banking stocks among the stronger performers.
Australian futures are pointing to a 0.2% gain for the S&P/ASX 200 index when trading opens across the Tasman, while the kiwi dollar traded at 58.76 US cents at 7am in Auckland from 58.61 cents yesterday.
New Zealand’s NZX50 may come under pressure with six companies shedding rights to their dividends today, including heavyweights Ebos and Meridian. Commercial landlords Kiwi Property Group and Precinct Properties NZ, Vector and Sky Network Television round out the other firms going ex-dividend.
Meanwhile, the Australian Financial Review’s Street Talk column yesterday reported Potentia Capital hired Jarden to sell its 19% stake in cinema analytics firm Vista at $3 a share, a 5.1% discount to the $3.16 closing price. Potentia bought in at $2.10 a share last year and unsuccessfully agitated for board representation.
Local data today include Statistics New Zealand’s building work put in place for the June quarter, which is expected to show a decline in activity in the period, while the NZ Debt Management office’s latest auction is offering $450 million of nominal government bonds and $25 million of inflation-linked notes.
Reporting by Paul McBeth. Image from Pathum Danthanarayana on Unsplash.
