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.
The Dow Jones Industrial Average
shed 113.36 points, or 0.3%, ending at 34,451.23.
The S&P 500
lost 54.00 points, or 1.2%, finishing at 4,392.59.
The Nasdaq Composite
dropped 292.51 points, or 2.1%, closing at 13,351.08.
For the week, the S&P 500
shed 2.1% and the Nasdaq Composite
fell 2.6%, with both booking a second-straight week of losses. The Dow
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.
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.”
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.”
“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.
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.”
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.
shares fell 0.1% after profit and revenue fell but topped Wall Street expectations.
Rite Aid Corp.
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
a measure of the currency against a basket of six major rivals, rose 0.5%.
fell 3.4% to under $39,800.
—William Watts contributed reporting