All three major U.S. stock indexes posted weekly losses ahead of the Good Friday holiday.
“It’s a combination of continued worries still there,” said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. “It’s a mixed bag earning season so far, and that, coupled with high inflation and the hawkish Fed have led to selling ahead of the holiday weekend.”
Rising 10-year Treasury yields pressured growth stocks, weighing the S&P 500 and the Nasdaq into negative territory, while the Dow posted a more modest loss.[US/]
“The higher yields pressure higher growth stocks as their net present value … takes a hit when yields go higher,” Detrick said.
A quartet of large U.S. banks shifted the first quarter reporting season into overdrive, with Goldman Sachs Group Inc, Citigroup Inc, Morgan Stanley, and Wells Fargo & Co all posting results.
While all four beat Street estimates, they also reported steep profit declines. Their share price reaction was mixed, and the broader S&P 500 Finance index closed lower.
“There’s some concerns this earnings season,” Detrick added. “Expectations are the lowest since the recovery started and it’s got investors cautious of how companies will step up to the earnings altar in the comings weeks.”
A host of economic data showed spiking gasoline prices helped retail sales beat consensus and prompted the largest jump in import prices in nearly 11 years.
The data falls in lockstep with other recent indicators, which appear to cement aggressive inflation-curbing actions from the Federal Reserve in the coming months, including a series of 50 basis point interest rate hikes.
Tesla Inc Chairman Elon Musk offered to take Twitter Inc private with a $41 billion cash offer. The social media company’s shares oscillated throughout the session but closed in negative territory.
According to preliminary data, the S&P 500 lost 54.38 points, or 1.22%, to end at 4,392.21 points, while the Nasdaq Composite lost 293.67 points, or 2.15%, to 13,349.92. The Dow Jones Industrial Average fell 109.83 points, or 0.32%, to 34,454.76.
The first-quarter reporting season is still in its infancy, with 34 of the companies in the S&P 500 having reported.
Analysts now expect aggregate annual S&P 500 earnings growth of 6.3%, less optimistic than the 7.5% growth projected at the beginning of the year.
Thursday marked the monthly expiration for options contracts, an occurrence that has in the recent past helped amplify stock market gyrations as investors make adjustments to account for millions of expiring options contracts on stocks, ETFs and indexes.
(Reporting by Stephen Culp; additional reporting by Saqib Ahmed in New York, Bansari Mayur Kamdar and Devik Jain in Bengaluru; editing by Grant McCool)