S&P 500 Gives Up Gains Amid Rising Treasury Yields, Tesla Slump

By Yasin Ebrahim

Investing.com -- The S&P 500 gave up gains Thursday, as rising Treasury yields weighed on investor sentiment, just as the bulk of quarterly results continued to suggest corporate America is in better shape than feared.

The S&P 500 fell 1%, the Dow Jones Industrial Average fell 0.5% or 139 points, and the Nasdaq was down 0.9%.

The 10-year Treasury yield jumped to fresh 14-year highs as investors weighed up fresh remarks from Federal Reserve officials calling for the central bank to remain the course on rate hikes.

Citing a "disappointing lack of progress on curtailing inflation," Philadelphia Federal Reserve President Patrick Harker said he expects interest rates will be “well above 4% by the end of the year.”

The remarks come as fewer-than-expected weekly jobless claims pointed to strength in the labor market, heightening concerns about ongoing wage growth.

“Demand for labor remains quite strong […] it remains the case that workers who are let go are still having a relatively easy time finding a new job,” Jefferies said in a note.

Tech stocks managed to cut losses but remained under pressure as rising Treasury yields make growth corners of the market including tech less attractive.

International Business Machines (NYSE:IBM), however, bucked the trend to rise more than 4% after the tech giant reported quarterly results that beat estimates on both the top and bottom lines.

Tesla (NASDAQ:TSLA), meanwhile, fell more than 7% after a miss on third-quarter earnings, though some on Wall Street touted optimism ahead for the EV maker after management said they are considering initiating a stock buyback.

“We are encouraged that management is considering a $5- $10B buyback and believe it is a constructive use of cash,” Oppenheimer said after lifting its price target on the stock to $436 from $432. “[We] believe depth of demand is outstripping most investor expectations, even when considering a looming recession,” it added.

The broader market was also pressured by a fall in travel stocks as investors weighed up quarterly results from airlines and railroad companies.

American Airlines (NASDAQ:AAL) reported quarterly earnings that beat estimates as travel demand continued to recover, but its shares fell more than 3%.

Railroad stocks were hurt by Union Pacific 's (NYSE:UNP) weaker outlook on carload growth and stock repurchases, which offset the quarterly results beat on the top line.

Elsewhere, AT&T Inc (NYSE:T) rallied 7% after the telecom reported better-than-expected earnings and revenue and lifted its outlook on full-year earnings to $2.50 from $2.46 a share previously.