DJIA: 35,160.79, up 249.59
S&P 500: 4,459.45, down 2.76
Nasdaq: 13,453.07, down 166.59
Stocks finish mixed during choppy session
U.S. stocks finished mixed on Wednesday as investors assessed key corporate earnings reports. The Dow jumped 249 points, while the S&P 500 slipped 0.1%. The Nasdaq Composite lost 1.2% amid a more than 35% slump in Netflix Inc. The streaming giant unexpectedly posted its first loss in subscribers in a decade and became the subject of multiple analyst downgrades as the company projected another sizable decline of its user base for the current quarter. In other earnings, International Business Machines Corp. climbed 7.1% after topping consensus profit and revenue estimates amid strength in its hybrid-cloud offerings. Elsewhere, Procter & Gamble Co. added 2.7% after posting its largest year-over-year advance in sales in 20 years.
Treasuries strengthened as some on Wall Street suggested inflation may be peaking, with monetary policy tightening expectations overdone. Additionally, robust demand for the 20-year bond auction provided downward pressure on yields. The 10-year note yield fell nine basis points (0.09%) to 2.84% after climbing as high as 2.98% in overnight trading–a peak not seen since December 2018. Notably, 10-year real yields (which strip out the effects of inflation) briefly turned positive for the first time since March 2020.
In central bank news, the Federal Reserve’s Beige Book revealed economic activity expanded at a moderate pace from mid-February to early April despite businesses contending with ongoing labor shortages and elevated inflation. On the data front, MBA mortgage applications fell for a sixth consecutive week (-5%) as mortgage rates surged to a 12-year peak. Separately, existing home sales declined a smaller-than-projected 2.7% in March, while home prices climbed to record last month.
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