US Stocks Down On Earnings, Rate Jitters

US equity markets closed lower on Thursday at the end of a holiday-shortened week as bond yields resumed their uphill climb and investors contended with mixed earnings and economic data.

All three major US stock indexes posted weekly losses ahead of the Good Friday holiday. The Dow Jones Industrial Average fell 0.33 percent to 34,451, the S&P 500 lost 1.21 percent to 4,392 and the Nasdaq Composite dropped 2.1 percent to 13,351.

"It’s a combination of continued worries still there," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "It's a mixed bag earning season so far, and that, coupled with high inflation and the hawkish Fed have led to selling ahead of the holiday weekend."

Rising 10-year Treasury yields pressured growth stocks, dragging the S&P 500 and the Nasdaq deeply into negative territory, while the Dow posted a more modest loss.

"The higher yields pressure higher growth stocks as their net present value ... takes a hit when yields go higher," Detrick said.

A quartet of large US banks shifted the first quarter reporting season into overdrive, with Goldman Sachs, Citigroup, Morgan Stanley, and Wells Fargo all posting results.

While all four beat Street estimates, they also reported steep profit declines.

"There’s some concerns this earnings season," Detrick added. "Expectations are the lowest since the recovery started and it's got investors cautious of how companies will step up to the earnings altar in the comings weeks."

A host of economic data showed spiking gasoline prices helped retail sales beat consensus and prompted the largest jump in import prices in nearly 11 years.

The data falls in lockstep with other recent indicators, which appear to cement aggressive inflation-curbing actions from the Federal Reserve in the coming months, including a series of 50 basis point interest rate hikes.

Tesla Chairman Elon Musk offered to take Twitter private with a US$41 billion cash offer. The social media company's shares oscillated throughout the session but closed down 1.7 percent. (Reuters)