Tech Stocks dip as Rising Bond Yields Pressure Growth Stocks
3:16 pm Thursday, April 14th, 2022
Wall Street was mixed on Thursday at the end of a holiday-shortened week as benchmark bond yields resumed their uphill climb and investors juggled earnings and economic data.
Briefly, the 10-yr yield has jumped 12 basis points to 2.81% following economic data that showed ex-autos retail sales for March increase more than expected, weekly jobless claims that remained near historically low levels, and import/export data for March that remained elevated.
Accordingly, the S&P 500 information technology (-1.7%), communication services (-1.5%), and consumer discretionary (-1.3%) sectors, which are home to the mega-caps, are down more than 1.0% right now. The Vanguard Mega Cap Growth ETF (MGK) is down 1.6%.
There’s been little interest to buy the dip with the S&P 500 sliding back below its 50-day moving average (4419) in a slow grind lower. Five sectors are trading higher, but none with a gain more than 0.4% (energy and consumer staples).
Moving to earnings news, Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS), and Citigroup (C) are representing a mixed batch of reactions in the banking industry. WFC is sticking out with a 5% decline after missing revenue estimates.
Dow component UnitedHealth (UNH) has coughed up a record-setting gain despite beating top and bottom-line estimates and raising its FY22 EPS guidance.
Twitter (TWTR), meanwhile, is a bit of its own story. Elon Musk offered to acquire the company for $54.20 per share in cash, but the market isn’t confident that the company will take the offer. TWTR shares are up just 0.7% after rising more than 10% in pre-market action.
Initial jobless claims increased by 18,000 to 185,000 (consensus 175,000) for the week ending April 9. Continuing jobless claims for the week ending April 2 were down by 48,000 to 1.475 million.
Total retail sales increased 0.5% month-over-month in March (consensus 0.6%) following an upwardly revised 0.8% increase (from 0.3%) in February. Excluding autos, retail sales jumped 1.1% (consensus 0.9%) following an upwardly revised 0.6% increase (from 0.2%) in February.
