* Major U.S. indexes fall, Nasdaq off ~1%; Russell 2000 off ~2%
* Energy weakest major S&P 500 sector; utilities lead gainers
* Dollar edges up; crude slumps, gold rises
* U.S. 10-Year Treasury Yield ~1.56% Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at email@example.com
BACK TO BACK (1605 EDT/2005 GMT)
Major indexes closed lower on Wall Street for a second straight session on Tuesday, the first consecutive daily drops for the S&P 500 .SPX since the end of March as concerns about the pace of the reopening was questioned in the face of rising global coronavirus cases.
Hospitals in the Indian capital of Delhi would start running out of medical oxygen, according to authorities, by Wednesday as Prime Minister Narendra Modi said the country faced a coronavirus "storm" overwhelming its health system. In addition, a land-border closure between the U.S. and Canada was extended. .XAL fell more than 4% and the Russell 2000 .RUT once again struggled, putting the small cap index down more than 7% from its mid-March closing record high.
Even a pullback in the yield on the 10-year U.S. Treasury note US10YT=RR on virus concerns failed to entice investors into growth names, with tech lower .SPLRCT , while sectors that have been part of the reflation trade such as energy .SPNY and financials .SPSY were also weak. As such, defensive plays including utilities .SPLRCU and real estate .SPLRCR outperformed.
is your closing market snapshot:
BOFA CLIENTS DUMP U.S. STOCKS AS EUPHORIA EASES (1349 EDT/1749 GMT)
BofA Securities clients last week were big sellers of stocks with outflows the largest in five months.
Clients were net sellers of U.S. equities to the tune of $5.2 billion, the biggest sales since mid-November and the fifth largest in data history since 2008, according to a BofA Global Research Equity & Quant Strategy report.
When flows were that, or more, negative, the subsequent week's returns were about -1% on an average/median basis with negative returns 75% of the time, strategist Jill Carey Hall wrote in the note.
Four-week average flows have been trending lower in recent weeks and have now turned negative for the first time since mid-February, Hall said, "suggesting a pause to increasingly euphoric sentiment."
Private/retail clients extended their buying streak to eight straight weeks, while institutions and hedge funds offloaded, the latter for a third consecutive week, per the report.
FUN WITH CHARTS: EATING IN VS DINING OUT (1300 EDT/1700 GMT)
More than a year after the rapid spread of COVID-19 shuttered restaurants and forced many Americans to learn to appreciate the joys of cooking, vaccine deployment and lifted restrictions are making a meal at a cozy restaurant seem like less of a death wish.
As local economies re-open, pent-up demand for a table for two will likely be a boon to the hard-hit restaurant sector, as well as other customer-facing services industries that suffered the brunt of the shutdowns.
For Reuters' interactive graphic on world vaccine rollout and access, click here https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.
But while grocery stores, which had trouble keeping up with demand even amid social distancing protocols, could see sales cool off, it remains to be seen whether the work-from-home/cook-at-home paradigm is here to stay.
The current earnings season is likely to provide the first glimpse at how these two related - yet rival - sectors will weather the shift as consumers click their Open Table app instead of Fresh Direct.
"With regard to the top line, we'll be watching average restaurant sales dollar volumes relative to 2019 levels to gauge the pace of recovery—rather than the significant upswing in late March/April comps—while also keeping a close eye on the cost environment," writes Christopher Carril, analyst at RBC Capital Markets.
The chart below shows price growth, demand growth and stock performance of eating in vs. dining out:
The consumer price index (CPI) shows "food at home" prices were initially far more volatile than "food away from home," although both have calmed down since November, when the FDA gave emergency approval to COVID-19 vaccines.
Retail receipts, unsurprisingly, show demand for groceries remains above pre-pandemic levels. But retail sales for food and beverage services is steadily recovering from 2020's February-April plunge, and in March of this year was just 5.1% below where they were at the beginning of last year.
As for the more forward-looking stock market, while investors appear to be betting on a restaurant recovery, they haven't turned against groceries. The S&P 1500 Restaurants index .SPCOMREST is neck-and-neck with the S&P 1500 Food Retail index .SPCOMRETF , with both up just over 30% since January 1, 2020.
APPLE VS THE NASDAQ 100: STATUS STILL BRUISED (1215 EDT/1615 GMT)
Apple AAPL.O has seen a strong rally off its early-March low. The stock jumped nearly 16% into Monday's close, putting it around 7% from of its $145.09 January record intraday high.
That said, the stock is down around 1% so far on Tuesday ahead of a virtual event at 1 PM (1300 EDT) today. The company is expected to unveil a new podcast subscription service and finally may show off tiny tags meant to locate lost items. The event will also likely feature new iPads and Mac computers. note, Apple peaked in relative strength vs the Nasdaq 100 .NDX in early-September last year. At that time, the AAPL/NDX ratio flirted with a more than 30-year resistance line, before ultimately failing ratio managed to return to this line again in late-January of this year. However, it once again failed and subsequently, in mid-February, broke below its 200-day moving average (DMA) for the first time since July 2019, further bruising Apple's status vs the index.
Despite the stock's recent rally, the ratio has yet to reclaim the long-term moving average. And with Tuesday's AAPL weakness, the ratio is ticking down slightly.
In any event, if Apple is to continue its relative recovery, the 200-DMA may present a significant hurdle.
CLOSING SNAPSHOT: EUROPE'S WORST DAY OF THE YEAR (1200 EDT/1600 GMT)
European shares slipped 2% from record highs and had their worst day since December 21 as COVID cases rose across Asia.
Worries that a possible reintroduction of COVID-19 emergency measures in Japan and record daily number of COVID deaths in India weighted on sentiment, pushing the pan-European index .STOXX down 2%. .SX7P , travel and leisure shares SXTP fell more and 3.6%. While basic material .SXPP and oil and gas .SXEP indexes also fell more than 3%.
Tobacco companies also weighed on Europe following a report the Biden administration was considering requiring tobacco companies to lower the nicotine levels in all cigarettes sold in the United States. Alves)
IPOS WADE INTO CHOPPY WATERS (1100 EDT/1500 GMT)
Another wave of IPOs are on tap as 15 hopefuls look to go public over the next two weeks even as investors have become more cautious.
The average return of 2021's crop of more than 100 debutantes now stands at about 5%, far below the roughly 50% average gain for last year's vintage, per Reuters calculation. This as the S&P 500 .SPX and Nasdaq .IXIC have advanced about 10% and 7%, respectively, so far this year.
Amid last week's mixed bag of outcomes, KKR KKR.N -backed mobile app and gaming firm AppLovin Corp APP.O was a notable flop as its shares tumbled out of the gate. APP shares are up more than 2% on Monday, but remain 25% below their IPO price SPAC (special-purpose acquisition company) new issuance has slowed to a trickle recently as the U.S. SEC has issued accounting guidance and stepped up scrutiny on disclosures, fees, conflicts and sponsor compensation. Still, 308 SPACs have already raised $100 billion year-to-date vs 248 that raised $83 billion all of last year, according to SPAC Research.
Below is the near-term IPO calendar, by expected debut date and approximate deal size (assuming mid-point pricing):
DoubleVerify DV.N (digital ad software) (~$340M)
NeuroPace NPCE.O (medical devices)(~$85M)
Skywater Technology SKYT.O (semiconductors) (~$75M)
UiPath PATH.N (automation software) (~$1.3B) 22:
KnowBe4 KNBE.O (cybersecurity) (~$200M)
Zymergen ZY.O (biochemistry) (~$400M)
Agiliti Inc AGTI.N (medical equip svcs) (~$500M)
Impel NeuroPharma IMPL.O (biotech) (~$80M)
Latham Group SWIM.O (swimming pools) (~$400M)
Treace Medical Concepts TMCI.O (medical devices) (~$150M)
Rain Therapeutics RAIN.O (biotech) (~$125M)
FTC Solar FTCI.O (solar equipment) (~$350M)
Aveanna Healthcare AVAH.O (healthcare svcs) (~$650M)
Endeavor Group EDR.N (UFC owner) (~$500M)
Fortegra Group FRF.N (insurance) (~$130M)
AS DEMAND AND ACTIVITY CLIMB, WILL OIL KEEP PACE? (1002 EDT/1402 GMT)
Pickle sees a similar result for the major components of oil demand - gasoline, distillate and jet fuel. Looking at the four-week average of components and comparing it to the 2015-2019 period shows gasoline and distillate demand around 90% of normal levels, with jet fuel at around 70%.
Pickle also looked at U.S. activity levels at airport security checkpoints, restaurant diners and overall population mobility. To him, these indicate the U.S. has made up much of the ground lost, but is "not quite back to normal."
But as oil prices recently reached levels seen just before the pandemic, Pickle does not think they will continue to climb even with activity ramping up as the pandemic fades.
Pickle notes that OPEC's spare capacity reached "unprecedented extremes in 2020 and they are still a long ways off from bringing that level down," and as such he expects the crude price to have a hard time sustaining much higher levels.
And while OPEC and other producers have been reluctant to release more crude, Pickle expects that hesitation will fade as the year moves on and economic growth along with oil demand prove to be more resilient, bringing about a fade in prices by year-end.
S&P 500 DEFENSIVE SECTORS: REARING THEIR UGLY HEAD? (0900 EDT/1300 GMT)
The S&P 500 index .SPX hit new record highs last week. However, a sudden relative strength shift which has the benchmark index underperforming a composite of its defensive sectors suggests the market may be in the early stages of a surprise "risk-off" phase:
Indeed, the ratio of the SPX to a composite of its defensive sectors: real estate .SPLRCR , staples .SPLRCS , and utilities .SPLRCU , on a weekly basis, spiked to an all-time high of 3.24 in late February.
However, since then, and despite the SPX having continued to advance, the ratio put in a lower high earlier this month.
Of note, looking back to late 2018, after hitting fresh record highs, the S&P 500 has suffered four sharp declines: two modest, averaging just over 7%, and two major averaging just about 28%, that were preceded by SPX/defensive composite ratio divergence.
Therefore, unless the SPX makes new highs and the ratio surpasses its late-February peak, the market may be vulnerable, given that it may actually be sapped of its animal spirits.
FOR TUESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE: SPX04202021
https://tmsnrt.rs/3swX4MI stoxx final
https://tmsnrt.rs/3vj2oVR Eating in v Dining out
https://tmsnrt.rs/3sCVcBU Closing levels April 20
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel and Lance Tupper are Reuters market analysts. The views expressed are their own)
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