U.S. stock-indexes traded mostly lower Thursday ahead of the final trading session of a holiday-shortened week, as investors digested results from major Wall Street banks and economic data, including March retail sales.
The Dow Jones Industrial Average
edged down 21 points, or 0.1%, to 34,544.
The S&P 500
lost 38 points, or 0.8% to 4,409.
The Nasdaq Composite
dropped 235 points, or 1.7% to 13,408.
Stocks ended on a strong note Wednesday, with the S&P 500
and Nasdaq Composite
snapping three-day losing streaks, while the Dow
advanced 344.23 points, or 1%. Indexes were on track for a losing week, however. U.S. equity markets will be closed on Good Friday.
What’s driving the market
“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.
“But I’m really interested in hearing from some of these other groups that are going to be able to talk more about how the consumer is reacting from a spending perspective, how inflation is impacting their business, if they’re still able to pass higher prices on to consumers, how margins look, and really, what their outlook is for the year ahead,” Bell said.
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 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. With the retail sales data, “the headline number looked pretty strong, but when you read into it, you saw that it was primarily driven by higher gasoline prices,” Bell said.
“On the flip side, you also saw that auto sales, used car pricing is starting to come down,” according to Bell.
Federal Reserve Gov. Christopher Waller told CNBC Wednesday afternoon that inflation likely had peaked, but that the central bank needed to press ahead with aggressive rate increases and monetary tightening to get it under control. Waller said he continued to support a 50 basis point rate hike in May and “possibly more in June and July,”
Treasury yields were higher Thursday, with the yield on the 10-year Treasury note
up 11 basis points at 2.80%.
“To be honest, with hopes over an imminent resolution in the conflict between Russia and Ukraine diminishing, and with most major central banks hiking — or preparing to hike — more aggressively than previously thought, we don’t see a clear and valid catalyst behind the rebound in equities,” said Charalambos Pissouros, head of research at JFD Group, in a note.
“Perhaps it was a short-covering bounce. We will hold the view that the path of least resistance remains to the downside,” the analyst wrote.
Furthermore, the European Central Bank on Thursday said it expected to end net asset buys under its Asset Purchase Program in the third quarter.
What companies are in focus
Twitter shares were 0.3% higher Thursday 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 nearly 1% after beating profit and revenue targets. Wells Fargo & Co. WFC shares were down 4.5% as the bank beat earnings targets, while falling short on revenue. Citigroup Inc. C shares gained 1.4% as the bank posted a 46% drop in profit for the first quarter, while the earnings still topped analysts’ estimates.
Rite Aid Corp.
shares edged up 0.7% 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.
What other assets are doing
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was up 0.5%.
was down 2.9% to trade under $40,000.
—William Watts contributed reporting