US stocks drop; investors eye Musk’s offer for Twitter
NEW YORK – Stocks closed lower on Wall Street Thursday as investors gave mixed reviews to earnings from four of the nation’s largest banks.
The S&P 500 fell 1.2%, ending a shortened trading week with a 2.1% decline. The Dow Jones Industrial Average fell 0.3% and the Nasdaq composite lost 2.1%. Both indexes also ended in the red for the week.
A quartet of big banks reported noticeable declines in their first-quarter profits as the latest earnings season kicks into gear. Volatile markets and the war in Ukraine caused deal-making to dry up while a slowdown in the housing market meant fewer people sought mortgages.
Citigroup rose 1.6% while Wells Fargo fell 4.5%. Morgan Stanley rose 0.7% and Goldman Sachs slipped 0.1%.
Bond yields rose again, sending the 10-year Treasury yield to 2.83%, and the price of U.S. oil rose, finishing nearly 11% higher for the week.
“With higher oil prices, higher bond yields, (it) implies the market continues to worry about inflation, worried about Ukraine, worried about the Fed’s response to all of this,” said Sam Stovall, chief investment strategist at CFRA.
The S&P 500 fell 54 points to 4,392.59. The Dow dropped 113.36 points to 34,451.23. The Nasdaq fell 292.51 points to 13,351.08. The U.S. stock market will be closed for Good Friday.
Technology stocks led the way lower Thursday, offsetting gains elsewhere in the market. Pricey valuations for many of the bigger technology companies give them more sway in directing the broader market higher or lower. Microsoft fell 2.7%.
Retailers and other companies that rely on consumer spending also weighed on the market. Amazon fell 2.5%. Energy stocks rose along with the price of crude oil. Exxon Mobil rose 1.2%.
Smaller company stocks also lost ground. The Russell 2000 fell 20.12 points, or 1%, to 2,004.98.
Investors again turned their attention to the drama surrounding Tesla founder and CEO Elon Musk and Twitter. Musk offered to buy the social media company for $54.20 a share, two weeks after revealing he’d accumulated a 9% stake.
Musk has criticized Twitter for not living up to free speech principles and said, in a regulatory filing, that it needs to be transformed as a private company. Twitter’s stock fell 1.7% at $45.08, well below Musk’s offering price.
Investors received another update on the recovery in the jobs market. The number of people seeking unemployment benefits ticked up last week, according to the Labor Department, but it remained at a historically low level. The data reflect a robust U.S. labor market with near record-high job openings and few layoffs.
Besides the banks, insurer UnitedHealth Group was the other big name on the earnings docket. UnitedHealth rose 0.4% after reporting solid first-quarter results and raising its 2022 forecasts.
Investors are closely watching the latest round of corporate earnings to determine how companies have been dealing with rising costs and whether consumers have pulled back their spending.
Gold for June delivery fell $9.80 to $1,974.90 an ounce. Silver for May delivery fell 33 cents to $25.70 an ounce and May copper rose 1 cent to $4.72 a pound.
The dollar rose to 125.99 Japanese yen from 125.62 yen. The euro fell to $1.0831 from $1.0886.