Stock Market News Today: Markets fluctuate amid earnings deluge (SP500)

Apr 24, 2024
stock-market-news-today:-markets-fluctuate-amid-earnings-deluge-(sp500)

Wall Street on Wednesday recovered some of its losses, as a slump in industrial stocks and a surge in Treasury yields grappled with a historic post-earnings gain in Tesla (TSLA).

The first quarter earnings season has kicked into high gear with a deluge of reports from heavyweight names. All eyes are on Meta Platforms’ (META) numbers after the closing bell.

The tech-heavy Nasdaq Composite (COMP:IND) had earlier jumped nearly 1% after the start of regular trading, lifted by a massive advance in Tesla (TSLA). The electric vehicle giant’s stock saw its best reaction to a quarterly report since before the COVID-19 pandemic, after top boss Elon Musk touted new mass-market models and suggested that Tesla (TSLA) should now be valued as an artificial intelligence robotics company.

After briefly slipping into the red, the Nasdaq (COMP:IND) was back in positive territory, last up 0.28% to 15,740.93 points in afternoon trade. The benchmark S&P 500 (SP500) added 0.10% to 5,075.55 points, while the blue-chip Dow (DJI) climbed 0.04% to 38,518.70 points.

Of the 11 S&P sectors, six were now in the green.

Industrials topped the losers, sliding ~1.5%. Trucking and transportation stocks exerted a significant drag on the sector, continuing a recent pullback after disappointing quarterly reports from companies such as CSX (CSX), J.B. Hunt Transport Services (JBHT) and Old Dominion Freight Line (ODFL). Defense contractor General Dynamics (GD) also weighed on the sector after missing profit expectations.

Wednesday’s other major earnings-related moves: Hasbro (HAS) was the top percentage gainer on the S&P 500 (SP500), after the toy maker trimmed its quarter-end inventory and increased its profitability; Boeing (BA) erased earlier gains sparked by a better-than-feared quarterly loss, following a report that its effort to reacquire parts supplier Spirit AeroSystems (SPR) was getting bogged down; and drugmaker Biogen (BIIB) climbed after it said that the uptake for its Alzheimer’s therapy Leqembi was improving.

Favorably received earnings reports from other heavyweights on Monday and Tuesday had helped Wall Street end higher in back-to-back sessions and rebound from its worst week in over a year.

Turning to the fixed-income markets, Treasury yields were higher as investors dumped bonds, which in turn put pressure on equities. The move was driven by a combination of factors, including position squeeze, concerns following strong Treasury auctions recently and fresh conflict in the Middle East between Israel and Iran-backed Hezbollah in Lebanon.

The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both up 6 basis points each to 4.79% and 4.66%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 1 basis point to 4.95%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

“With ~40% of U.S. companies (by market cap) reporting this week, the price action may depend on earnings and could stabilize near-term. Beyond this, however, we think the sell-off has further to go. We remain concerned about continued complacency in equity valuations, inflation staying too hot, further Fed repricing, and a profit outlook where the implied acceleration this year might end up too optimistic,” JPMorgan’s Marko Kolanovic said.

“The current market narrative and patterns are increasingly resembling those of last summer, when upside inflation surprises and hawkish Fed revisions drove a correction in risk assets, but investor positioning now appears more elevated,” Kolanovic added.

Looking at Wednesday’s economic calendar, the docket was quite light. The most notable release was durable goods orders which rose more than expected in March. Wells Fargo said that weak shipments in the durable goods data posed a downside risk for U.S. Q1 GDP growth, the first estimate of which is due on Thursday.

Leave a comment