Stocks fell in choppy trading on Thursday as investors weighed several key earnings reports and kept a watch on the bond market, where Treasury yields proceed to climb.
The Dow Jones Industrial Average slipped 90.22 points, or 0.30%, to 30,333.59. The S&P 500 fell 0.80% to three,665.78. The Nasdaq Composite shed 0.61% to shut at 10,614.84. The Dow was up nearly 400 points at session highs, but stocks faded as Treasury yields rose.
The benchmark 10-year Treasury yield reached a high of 4.239% on Thursday, trading at levels not seen since 2008. Rising rates have been a headwind for stocks all yr, because the Federal Reserve continues to attempt to cool off inflationary pressures not seen in many years.
“So long as official policy is to make the stock market go down, so that folks are less wealthy, in order that they buy fewer things, in order that prices stop going up, all while doing nothing about fiscal policy, we consider the right posture is to be bearish on stocks and bullish on inflation,” Greenlight Capital’s David Einhorn said in an investor letter obtained by CNBC.
Stocks have declined for 2 straight days, but the key averages are still up greater than 2% for the week.
Several strong earnings reports limited losses for the market, with AT&T and IBM rising 7.7% and 4.7%, respectively, after beating estimates on the highest and bottom lines for his or her most up-to-date quarter.
On the downside, Tesla shares dropped greater than 6% after the electrical vehicle maker said Wednesday evening it expects to miss its 2022 deliveries goal. The corporate also posted quarterly revenue that missed analysts’ expectations.
The rising Treasury yield environment is one reason that many strategists are skeptical the market can sustain a rally within the near term, regardless that the third-quarter earnings season has been higher than expected to this point.
“Our guess is that earnings can be adequate to maintain the market in a trading range, but not enough to send it back as much as its midsummer high and given the lagged nature of monetary policy, we’d argue that point is just not available on the market’s side. We’d note that US rates proceed to push out to latest cycle highs, helping the USD trounce its peers,” Michael Shaoul of Marketfield Asset Management said in a note.
Indeed, the dollar hit its highest level against the Japanese yen since 1990 on Thursday.
