DJIA: 34,792.76, down 368.03
S&P 500: 4,393.66, down 65.79
Nasdaq: 13,174.65, down 278.42

Stocks give up early gains; Yields jump

U.S. stocks ended broadly lower on Thursday as investors assessed commentary from Federal Reserve (Fed) Chair Jerome Powell and monitored another jump in Treasury yields. The Fed chief indicated that front-loading the current tightening cycle could be warranted to combat high inflation. Powell also confirmed that a larger-than-normal 0.50% rate hike would remain an option for the May meeting. All three major averages staged a sharp reversal from earlier gains that had come on the back of strong corporate earnings results. The Dow slid 368 points, erasing a more than 300 point rally. The S&P 500 lost 1.5%, while the Nasdaq Composite dropped 2.1% to turn negative for the week.

Treasuries resumed their downtrend, with yield on the 10-year note up five basis points (0.05%) to 2.89%. The more Fed-sensitive two-year note yield spiked nine basis points (0.09%) to 2.66%. Meanwhile, the 30-year fixed mortgage rate increased to 5.11% in the last week, the highest level since April 2010. On the data front, weekly initial jobless claims came in at 184,000, underscoring a tight labor market. Separately, the leading index climbed 0.3% last month, while a gauge of the business outlook in the Philadelphia region declined more than expected in April.

All 11 S&P 500 sectors finished in negative territory. Airlines offered a bright spot after both American Airlines Group Inc. and United Airlines Holdings Inc. provided positive current-quarter guidance. In other earnings, Tesla Inc. rose 3.2% after easily topping analyst expectations with a record profit. AT&T Inc. added 4.0% following an upbeat report that included a larger-than-anticipated rise in monthly phone subscribers.

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