Stock market today: Tesla, AT&T help drag Wall Street lower
By STAN CHOE
AP Business Writer
NEW YORK (AP) — Wall Street is slipping Thursday following mixed earnings reports from big companies and more signals the U.S. economy may be slowing.
The S&P 500 was 0.5% lower in early trading after drifting through a listless early part of the week. The Dow Jones Industrial Average was down 149 points, or 0.4%, at 33,747, as of 9:45 a.m. Eastern time, while the Nasdaq composite was 0.6% lower.
Tesla weighed heavily on the market for a second straight day on worries about how much profit it’s making on each of its electric vehicles. It dropped 6.2% in its first trading after reporting revenue for the first three months of the year that fell short of analysts’ expectations as it repeatedly cut prices on its models.
Several banks also tumbled after reporting weaker profits and revenue than expected, including KeyCorp and Zions Bancorp. The spotlight has been particularly harsh on smaller and mid-sized banks amid worries their customers may pull out deposits following the second- and third-largest U.S. bank failures in history last month.
Zions fell 4.6%, and KeyCorp dropped 4.4%.
AT&T sank 6.7% after it reported slightly weaker revenue than analysts forecast, though profit squeaked past expectations.
Yields were also falling in the bond market following a couple reports on the U.S. economy.
Slightly more workers filed for unemployment benefits last week than the week before, a potential signal that the labor market is starting to soften under the weight of much higher interest rates. The number of continuing claims for jobless benefits also rose to the highest level since November 2021, according to Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
A separate report said that manufacturing trends in the mid-Atlantic region weakened by much more than economists expected.
They helped drag the yield of the 10-year Treasury down to 3.53% from 3.59% late Wednesday. The two-year yield, which more closely tracks expectations for the Federal Reserve, fell to 4.17% from 4.25%.
The Fed has intentionally been trying to cool the overall economy for more than a year in hopes of reining in high inflation. It does that by raising short-term interest rates. It’s an effective but blunt tool that slows the broad economy, raising the risk of a recession and hurting prices for investments.
Thursday’s easing of yields helped cushion the drops for stocks because lower rates tend to give a boost to investments.
On the winning side of Wall Street was D.R. Horton, which jumped 8%. The homebuilder reported stronger profit and revenue than expected.
The housing market was one of the first in the economy to bend under the weight of much higher interest rates wrought by the Fed, as mortgage rates quickly climbed.
Broadly, the majority of companies have been topping profit forecasts so far in the early days of this reporting season. That’s likely in large part because expectations were quite low coming into it.
Analysts were forecasting this would mark the sharpest drop in S&P 500 earnings per share since the pandemic was pounding the economy in 2020.
In markets abroad, Asian stock indexes were mixed after Japan reported its trade deficit narrowed in March as exports rose more than expected. But exports to China fell, reflecting the slow pace of the recovery from pandemic disruptions.
European stocks were lower.
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AP Business Writer Elaine Kurtenbach contributed.
