Stocks fall; Investors eyeing Elon Musk’s bid for Twitter

NEW YORK >> Stocks closed lower on Wall Street today as investors gave mixed views on the earnings of four of the nation’s largest banks.

The S&P 500 fell 1.2%, ending a shortened trading week with a 2.1% drop. The Dow Jones Industrial Average fell 0.3% and the Nasdaq composite lost 2.1%. Both indexes also ended in the red for the week.

A quartet of big banks reported notable declines in first-quarter earnings as the latest earnings season kicks off. Market volatility and the war in Ukraine caused transactions to dry up, while a slowdown in the housing market led to fewer people looking for mortgages.

Citigroup rose 1.6% while Wells Fargo fell 4.5%. Morgan Stanley rose 0.7% and Goldman Sachs slipped 0.1%.

Bond yields rose again, pushing the 10-year Treasury yield to 2.83%, and the price of US oil rose, ending nearly 11% higher for the week.

“With higher oil prices, higher bond yields, (it) implies that the market continues to be worried about inflation, about Ukraine, about the Fed’s response to all of this,” he said. Sam Stovall, chief investment strategist at CFRA.

The S&P 500 fell 54 points to 4,392.59. The Dow fell 113.36 points to 34,451.23. The Nasdaq fell 292.51 points to 13,351.08. The US stock market will be closed for Good Friday.

Tech stocks led the way lower today, reversing gains elsewhere in the market. The expensive valuations of many of the biggest tech companies give them more leverage to steer the broader market up or down. Microsoft fell 2.7%.

Retailers and other businesses that rely on consumer spending also weighed on the market. Amazon fell 2.5%. Energy stocks rose along with the price of crude oil. Exxon Mobil rose 1.2%.

Small company stocks also lost ground. The Russell 2000 fell 20.12 points, or 1%, to 2,004.98.

Investors once again turned their attention to the drama surrounding Tesla founder and CEO Elon Musk and Twitter. Musk offered to buy the social media company for $54.20 per share, two weeks after revealing he had accrued a 9% stake.

Musk criticized Twitter for failing to uphold free speech principles and said in a regulatory filing that it should be turned into a private company. Twitter’s stock fell 1.7% to $45.08, well below Musk’s offer price.

Wall Street had mixed economic data to review after several hot inflation reports earlier in the week. The Commerce Department said retail sales rose 0.5% in March, boosted by higher gasoline prices as consumers continued to spend despite high inflation.

Inflation remains at its highest level in 40 years in the United States and that forces economists and analysts to closely monitor the reaction of consumers to the rising prices of everything from food to clothing to essence. Inflation concerns escalated with Russia’s invasion of Ukraine, which made energy prices more volatile and contributed to rising oil and wheat prices globally.

US crude oil prices reversed an early decline today and settled 2.6% higher.

The head of the International Monetary Fund today warned that Russia’s war on Ukraine is weakening economic prospects for most countries in the world and reiterated the danger that high inflation poses to the global economy.

Rising prices are prompting the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help calm the growing demand that is contributing to the problem.

Bond yields have mostly risen as Wall Street braces for higher interest rates.

Investors received another update on the job market recovery. The number of people applying for unemployment benefits rose last week, according to the Labor Department, but remained at a historic low. The data reflects a robust US labor market with near-record job openings and few layoffs.

Besides the banks, insurer UnitedHealth Group was the other big name on the profit ledger. UnitedHealth rose 0.4% after reporting strong first-quarter results and raising its 2022 guidance.

Investors are watching the latest round of corporate earnings closely to see how companies have handled rising costs and whether consumers have cut spending.