Market Snapshot: S&P 500, Nasdaq flip negative as stocks shed earlier gains and bond yields rise

What’s driving markets

Stocks gave up some earlier gains on Thursday as bond yields rose, and Tesla TSLA, +5.92% shares climbed 6.3% as the electric vehicle maker posted better-than-forecast earnings, with the help of price hikes.

The Tesla results helped to offset earlier shock from fellow megacap technology giant Netflix Inc. NFLX, -3.93%, which slumped 35% on Wednesday after forecasting it will lose 2 million subscribers in the current quarter. Netflix shares fell another 4.4% on Thursday.

See: Netflix shares extend fall after Bill Ackman dumps stake and New Constructs predicts another 50% decline

“While earnings season so far has been mixed, Tesla’s numbers last night did much to restore optimism, especially at a tricky time for the company,” said Chris Beauchamp, chief market analyst at IG Group.

Earnings season is off to a strong start overall, with nearly 80% of companies that have reported so far topping profit forecasts, noted Mark Haefele, chief investment officer at UBS Global Wealth Management. While only 13% of S&P 500 companies have reported so far, resilience is likely to continue, he said, with earnings per share likely to grow by around 10%.

“But with heightened uncertainty over the pace of monetary tightening and the war in Ukraine, we recommend a neutral stance on equities overall,” Haefele said, in a note. “First quarter results so far highlight our view that investors need to be selective, focusing on sectors and themes with the potential to outperform.”

Traders also will be focusing on Washington, D.C. on Thursday, where Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde will join a panel discussion on the global economy. The euro EURUSD, -0.15% and German bond yields TMBMKDE-02Y, 0.209% rose after multiple ECB officials suggested the first eurozone rate hike of the cycle could come as early as July. The benchmark 10-year Treasury yield TMUBMUSD10Y, 2.952% rose about 9 basis points to 2.94%.

In U.S. data, first-time claims for unemployment benefits fell to 184,000, down 2,000, in the week ended April 16, the Labor Department said. The Philadelphia Fed’s regional manufacturing index fell to 17.6 in April from 27.4 a month earlier.

Companies in focus

• In a securities filing, Tesla Chief Executive Elon Musk said he had received commitment letters to provide $46.5 billion in funding for his offer to buy out social-media platform Twitter Inc. TWTR, +0.11%. Twitter shares rose 0.6%.
• Shares of United Airlines Holdings Inc. UAL, +10.05% jumped 11.4% after executives late Wednesday said they expect to report a profit this year, surprising investors. American Airlines Group Inc. AAL, +3.77% shares were up more than 5.2% after the air carrier reported a narrower-than-expected first-quarter loss and revenue that more than doubled to beat forecasts, and provided an upbeat sales outlook. The popular U.S. Global Jets ETF JETS, +3.54% rose 4.9%.
• Blackstone Inc. BX, -5.47% shares were off 4.7% after reporting distributable earnings that beat expectations.
• Carvana Co. CVNA, -4.32% shares fell 6.8% after the used-car retailer said that both industry-wide and company-specific issues affected its business in the first quarter but said that it had plans to address its challenges.
• Xerox Holdings Corp. XRX, -16.78% shares dropped 17% after the maker of copiers and printers swung to a loss in the first quarter, hamstrung by supply chain issues and inflationary pressures.

How other assets are trading

• The ICE U.S. Dollar Index DXY, +0.20% rose 0.2%.
• Bitcoin BTCUSD, +1.15% rose 2.2% to trade near $42,000.
• The Stoxx Europe 600 SXXP, +0.32% rose 0.3%, while London’s FTSE 100 UKX, -0.02% was flat.
• The Shanghai Composite SHCOMP, -2.26% fell 2.3%, while the Hang Seng Index HSI, -1.25% lost 1.3% in Hong Kong and Japan’s Nikkei 225 NIK, +1.23% rose 1.2%.

—Steve Goldstein provided additional reporting