STOCKS GIVE UP AN EARLY GAIN AND CLOSE LOWER ON WALL STREET
Stocks on Wall Street lost ground again Thursday, though the major indexes remained on pace for a weekly gain after a strong two-day rally earlier this week.
The S&P 500 fell 0.8 percent. Nearly three-fourths of the stocks in the benchmark index closed in the red, with retailers, banks and industrial companies among the biggest weights. The Dow average slipped 0.3 percent and the Nasdaq composite fell 0.6 percent. Small company stocks fell more than the broader market, pulling the Russell 2000 index 1.2 percent lower.
Treasury yields continued rising to multiyear highs, a trend that’s helped push up rates on mortgages and other loans. The yield on the 10-year Treasury climbed to 4.24 percent from 4.14 percent late Wednesday and is at its highest level in 14 years. The yield on the twoyear Treasury, which tends to track expectations for future Federal Reserve action, rose to 4.61 percent from 4.56 percent.
Corporate earnings remained a big focus for Wall Street all week as investors try to get a better picture of how companies are faring amid the hottest inflation in four decades and how they see the economy moving forward.
The results have been mixed so far. Several big companies released encouraging financial results, while others have disappointed investors with weak or worrisome warnings.
“Earnings growth estimates for the current quarter are coming in 3.6 percent higher than they were a year ago,“said Bill Northey, senior investment director at U.S. Bank Wealth Management. “Just a matter of months ago, the expectations were for 10 percent earnings growth in the third quarter. So there has been a material downgrade to the level of expected earnings growth this year.”
IBM rose 4.7 percent after its third-quarter earnings and revenue topped analysts’ forecasts. AT&T jumped 7.7 percent after also reporting strong results.
Tesla fell 6.6 percent after saying it will miss its target for vehicle deliveries this year. Union Pacific dropped 6.8 percent after the railroad operator predicted slower growth, suggesting that the economy may be slowing down. Rival CSX fell 3 percent. American Airlines fell 3.8 percent after reporting its latest results.
Allstate slumped 12.9 percent after giving investors a disappointing financial update.
All told, the S&P 500 fell 29.38 points to 3,665.78. The Dow lost 90.22 points to close at 30,333.59. The Nasdaq dropped 65.66 points to 10,614.84. The Russell 2000 fell 21.36 points, to 1,704.39.
Markets in Europe closed higher. British Prime Minister Liz Truss resigned following financial market turmoil caused by multiple policy U-turns.
Investors remain concerned about inflation and the potential for recessions throughout world. Wall Street is particularly worried about the Fed’s ongoing plan to raise interest rates in order to slow economic growth and tame high prices.