Tuesday, April 26, 2022

DJIA: 33,240.18, down 809.28
S&P 500: 4,175.20, down 120.92
Nasdaq: 12,490.74, down 514.11

Stocks sink on tech weakness; Yields slide

U.S. stocks sold off on Tuesday as a rout in growth-related shares deepened ahead of profit tallies from key mega-cap companies. Investors remained cautious as looming central bank rate hikes and renewed concerns around COVID-19 lockdowns in China lingered as market overhangs. The Nasdaq Composite slumped nearly 4% for its worst day since September 2020. The tech-heavy index fell back into bear market territory (defined as a 20% drawdown from a recent peak). The Dow dropped 809 points, while the S&P 500 lost 2.8%.

Perceived safe haven assets caught a bid. A gauge of the U.S. dollar climbed 0.6% to a fresh two-year high, while the yield on the 10-year note slid eight basis points (0.08%) to 2.74%. Meanwhile, the two-year note yield shed 12 basis points (0.12%) to 2.50% following robust demand for a $48 billion auction of the maturity. On the data front, the Conference Board’s measure of consumer confidence unexpectedly eased in April. Separately, new home sales slumped a larger-than-anticipated 8.6% in March, while two gauges of home prices saw record monthly upticks.

Ten of 11 S&P 500 sectors closed in negative territory. Consumer Discretionary lagged, pressured by a 12.2% slump in Tesla Inc. amid concerns that CEO Elon Musk would sell shares to fund his takeover of Twitter Inc. The Energy group provided a bright spot, with Valero Energy Corp. rising 4.2% after reporting its best margins since 2015. In other earnings, United Parcel Service Inc. lost 3.5% as fading pandemic demand offset its upbeat profit tally. General Electric Co. retreated 10.3% after flagging inflation and supply chain headwinds.

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