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Market Snapshot: Stocks fall Thursday ending holiday week lower; Twitter sheds 1.7% after Musk bid

U.S. stock-indexes finished lower Thursday, booking weekly declines in an abbreviated week of trade, with investors digesting quarterly results from major Wall Street banks and economic data, including March retail sales.

Shares of Twitter Inc.
TWTR,
-1.68%

gave up earlier gains to end lower after Tesla Inc.
TSLA,
-3.66%

chief Elon Musk offered to buy the whole company.

What happened

The Dow Jones Industrial Average
DJIA,
-0.33%

shed 113.36 points, or 0.3%, ending at 34,451.23.

The S&P 500
SPX,
-1.21%

lost 54.00 points, or 1.2%, finishing at 4,392.59.

The Nasdaq Composite
COMP,
-2.14%

dropped 292.51 points, or 2.1%, closing at 13,351.08.

For the week, the S&P 500
SPX,
-1.21%

shed 2.1% and the Nasdaq Composite
COMP,
-2.14%

fell 2.6%, with both booking a second-straight week of losses. The Dow
DJIA,
-0.33%

lost 0.8%, recording a third-straight week of losses. U.S. equity markets will be closed on Good Friday.

What drove the market

Stocks finished down Thursday, led lower by technology stocks, as Treasury yields rose sharply and China’s COVID lockdowns were extended to other cities beyond Shanghai.

News reports of supply-chain disruptions weighed on shares of iPhone maker Apple Inc.
AAPL,
-3.00%

and other technology companies, including Tesla. Musk also was in the spotlight for his $43 million takeover offered for Twitter.

“The Twitter news was big, and that’s causing Tesla shares to have a meaningful decline,” said Michael Stritch, chief investment officer at BMO Wealth Management, by phone. “The tech-complex has seen fallout from Chinese news on lockdowns expanding and facilities closing.”

Read: If Musk’s $43 billion Twitter takeover falls apart, who else has enough money to buy the company?

The S&P 500’s information and technology sector was its worst performer Thursday, down 2.5%, ahead of the long weekend. Tech shares also likely were under pressure from higher Treasury yields, with the 10-year Treasury note BX:TMUBMUSD10Y up 12 basis points to 2.808%, the highest since December 2018.

“There’s also a long weekend and volumes seem to be down,” Stritch at BMO said, adding that in a jittery environment “holding a long position over an extended weekend is probably more frowned upon.”

Earnings also were in focus Thursday after banks including Goldman Sachs
GS,
-0.10%
,
Morgan Stanley MS, Wells Fargo & Co. WFC, and Citigroup Inc. C reported mixed quarterly results.

“We are still very early on in the earnings season,” Lindsey Bell, chief markets and money strategist at financial services company Ally, said in a phone interview Thursday.

“I think my expectation going into earnings season, especially with the banks, was that they were going to set a somewhat cautious tone,” Bell said. “They are one of three sectors expected to report an earnings decline in the quarter, and they also have one of the toughest comparisons of all the 11 sectors that make up the S&P 500.

See: Goldman Sachs, Morgan Stanley, Citigroup report lower earnings

In U.S. economic data Thursday, retail sales rose a mild 0.5% in March and a large part of the increase reflected higher gasoline prices, suggesting inflation is taking a toll on U.S. households. Sales in February were revised up to show a 0.8% increase instead of 0.3%.

Initial jobless claims rose 18,000 to 185,000 in the week ended April 9, the Labor Department said Thursday. Claims had matched a 54-year low in the prior week.

The University of Michigan’s gauge of consumer sentiment rose in April to 65.7, a more than 10% increase from March’s reading of 59.4 as Americans anticipated gasoline prices to remain steady over the next year.

“I think that we are starting to see early signs that inflation is peaking,” Bell said.

New York Federal Reserve President, John Williams, said Thursday that the Fed needed to raise its benchmark interest rate “expeditiously” to get inflation under control. Asked about a half-point hike on May 4, Williams said “that’s not a decision we’ve made yet” but added “I think that’s a reasonable option for us because the federal-funds rate is very low.”

Read: This stock-market indicator says investors don’t think inflation has peaked: analyst

What companies were in focus

Twitter shares fell 1.7% Thursday, giving up earlier gains after Musk disclosed he was offering to buy all Twitter stock outstanding he doesn’t own for $54.20 a share, an 18.2% premium to Wednesday’s closing price of $45.85. 

Shares of Morgan Stanley MS gained 0.8% after beating profit and revenue targets. Wells Fargo & Co. WFC shares fell 4.5% as the bank beat earnings targets, while falling short on revenue. Citigroup Inc. C shares gained 1.6% as the bank posted a 46% drop in profit for the first quarter, while the earnings still topped analysts’ estimates. Goldman Sachs Group Inc.
GS,
-0.10%

shares fell 0.1% after profit and revenue fell but topped Wall Street expectations.

Rite Aid Corp.
RAD,
-3.60%

 shares slid 3.6% after it reported fourth-quarter revenue that beat consensus and gave guidance ahead of Street expectations. The pharmacy retailer posted a net loss of $389.1 million, or $7.18 per share, after a loss of $18.5 million, or 34 cents per share, last year.

How other assets performed

The ICE U.S. Dollar Index
DXY,
+0.46%
,
a measure of the currency against a basket of six major rivals, rose 0.5%.

Bitcoin
BTCUSD,
+0.31%

fell 3.4% to under $39,800.

Oil futures shrugged off earlier losses, with the U.S. benchmark
CL.1,
+2.20%

closing up 2.6% at $106.954 a barrel, while gold futures
GC00,
-0.37%

fell 0.5% to settle at $1,974.90 an ounce.

The Stoxx Europe 600
SXXP,
+0.67%

rose 0.7%, while London’s FTSE 100
UKX,
+0.47%

closed up 0.5%, but both booked weekly losses.

The Shanghai Composite
SHCOMP,
+1.22%

rose 1.2%, while the Hang Seng Index
HSI,
+0.67%

was up 0.7% in Hong Kong and Japan’s Nikkei 225
NIK,
+1.22%

gained 1.2%.

—William Watts contributed reporting

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