U.S. Stocks Fluctuate Before Closing Mostly Lower On Disappointing Earnings

Stocks staged a recovery attempt after coming under pressure in early trading on Thursday but moved back to the downside in the latter part of the session. The major averages finished the day firmly in negative territory.

The major averages climbed off their worst levels going into the close but remained in the red. The Dow dipped 110.39 points or 0.3 percent to33,786.62, the Nasdaq slid 97.67 points or 0.8 percent to 12,059.56 and the S&P 500 fell 24.73 points or 0.6 percent to 4,129.79.

The weakness on Wall Street partly reflected a negative reaction to the latest earnings news from several big-name companies.

Shares of Tesla (TSLA) plunged by 9.8 percent after the electric vehicle maker reported a steep drop in first quarter earnings amid disappointing profit margins.

Telecom giant AT&T (T) also posted a steep loss after reporting first quarter earnings that exceeded analyst estimates but weaker than expected revenues.

Shares of America Express (AXP) also moved to the downside after the credit card giant reported first quarter earnings that missed expectations.

Meanwhile, shares of IBM Corp. (IBM) closed nearly unchanged after the tech giant reported better than expected first quarter earnings.

Negative sentiment was also generated in reaction to some disappointing U.S. economic data, including a report from the Philadelphia Federal reserve showed regional manufacturing activity unexpectedly contracted at an accelerated rate in the month of April.

The Philly Fed said its diffusion index for current activity slumped to a negative 31.3 in April from a negative 23.2 in March, with a negative reading indicating a contraction. Economists had expected the index rise to a negative 19.2.

With the unexpected decrease, the Philly Fed Index dropped to its lowest level since hitting a negative 43.2 in May 2020.

The Labor Department also released a report showing first-time claims for U.S. unemployment benefits rose by slightly more than expected in the week ended April 15th.

The report said initial jobless claims crept up to 245,000, an increase of 5,000 from the previous week’s revised level of 240,000.

Economists had expected jobless claims to inch up to 240,000 from the 239,000 originally reported for the previous week.

Sector News

Tobacco stocks saw substantial weakness on the day, with the NYSE Arca Tobacco Index tumbling by 2.5 percent after ending Wednesday’s session at its best closing level in well over a month.

Considerable weakness was also visible among computer hardware stocks, as reflected by the 2.4 percent slump by the NYSE Arca Computer Hardware Index.

Data storage company Seagate Technology (STX) posted a steep loss after reporting weaker than expected fiscal third quarter revenues and providing disappointing guidance.

Banking stocks also showed a significant move to the downside, dragging the KBW Bank Index down by 1.8 percent. The index also ended Wednesday’s trading at a one-month closing high.

Telecom, oil service and networking stocks also saw notable weakness on the day, while housing stocks showed a strong move to the upside, driving the Philadelphia Housing Sector Index up by 1.6 percent.

Homebuilder D.R. Horton (DHI) helped lead the housing sector higher after reporting better than expected fiscal second quarter results.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.2 percent, while South Korea’s Kospi fell by 0.5 percent.

The major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index crept up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the German DAX Index slid by 0.6 percent.

In the bond market, treasuries moved to the upside after trending lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 5.7 basis points to 3.545 percent.

Looking Ahead

Overall trading activity may be somewhat subdued on Friday amid a relatively quiet earnings and economic calendar.

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