Asian shares mixed after strong earnings, data lift Wall St

Hong Kong Asian shares were mixed after strong corporate earnings and economic data lifted stocks on Wall Street. Hong Kong and Sydney advanced while Seoul declined. Tokyo and Shanghai were closed for holidays. On Monday, a strong dose of positive earnings reports and economic data that showed the U.S. economy is growing pushed the S&P 500 up 0.3 per cent U.S. futures were lower on Tuesday. Hong Kong's Hang Seng rose 0.4 per cent to 28,475.47 and the S&P/ASX 200 gained 0.3 per cent to 7,048.70.

In Seoul, the Kospi lost 0.4 per cent to 3,116.61. Shares rose in Jakarta but fell in Taiwan, Singapore and Malaysia. On Monday, shares of clothing retailer Gap Inc. and flooring manufacturer Mohawk Industries both gained more than 7 per cent. The Institute for Supply Management's manufacturing index came in at 60.7, well above the 50-point mark that indicates manufacturing activity is expanding. Federal Reserve Chairman Jerome Powell said the economic outlook has "clearly brightened" in the United States, but the recovery remains too uneven.

Health care and energy companies helped push stocks higher Monday, with the S&P 500 closing at 4,192.66. The Dow Jones Industrial Average added 0.7 per cent to 34,113.23. The tech-heavy Nasdaq shed an early gain, falling 0.5 per cent to 13,895.12. Smaller companies had a good showing. The Russell 2000 index picked up 0.5 per cent to 2,277.45. Stocks have been grinding higher on expectations of an economic recovery and strong company profits this year as large-scale coronavirus vaccination programs help people return to jobs and normal behaviours after more than a year of restrictions.

Massive support from the U.S. government and the Federal Reserve, and increasingly positive economic data, have also helped put investors in a buying mood, keeping stock indexes near their all-time highs. More than half of the companies in the S&P 500 have reported their results so far this earnings season, which show profit growth of 54 per cent so far, according to FactSet. This will be another busy week for earnings reports, with Merck, Pepsi, Colgate-Palmolive and CVS among the companies reporting their latest quarterly results.

Investors will also get April's jobs report on Friday. On the economic front, a report on U.S. manufacturing activity in April came in below economists' expectations, but still was strong for the month. The Institute for Supply Management's manufacturing index came in at 60.7 for April, compared with the 65.0 reading that was expected.