by David French
(Reuters) – U.S. stocks closed lower on Monday after a faltering afternoon session as investors were torn between positive Bank of America earnings and soaring bond yields.
The market awaits the publication of a salvo of results, which will allow it to assess the impact of the war in Ukraine and inflation on corporate accounts. Netflix, Tesla, Johnson & Johnson and IBM are due to release their results this week.
Weak volumes, linked to the closure of European markets, also contributed to the hesitant tone on Wall Street.
The Dow Jones index fell 0.11% to 34,411.69 points, the S&P-500 0.02% to 4,391.69 points and the Nasdaq Composite 0.14% to 13,332.36 points.
“The market is looking for direction. Will we get it through earnings? Maybe. ‘Inflation remains the driving factor,’ said Jack Janasiewicz, portfolio manager and senior portfolio strategist at Natixis Investment Managers.
Bank of America closed the earnings season for major Wall Street banks by announcing a less marked than expected drop in first quarter profits, thanks in particular to strong growth in consumer credit.
Large caps such as Apple Inc and Meta Platforms suffered as the yield on the benchmark 10-year Treasury bond rose to 2.85%, after hitting 2.884% earlier on Monday, the highest level since December 2018.
The rise in rates is negative for the big technology and growth stocks because the rise in the cost of credit is eating into their margins.
The Tesla title nevertheless shows an increase after announcing that it was preparing to reopen its Shanghai factory, which has been shut down for almost three weeks due to COVID-19.
Most of the S&P’s 11 major sectors are down, with the exception of energy, which benefited from higher crude prices, the price of which temporarily broke the bar of $114 a barrel for Brent.
Twitter ended higher after the group announced a “poison pill” to counter Elon Musk’s takeover bid last week and reports that private equity group Thoma Bravo is also considering an offer.
The title of the Chinese VTC giant Didi Global fell after the convening of an extraordinary general meeting which will be called upon to decide on a withdrawal from the listing of the group on the American markets.
(Report Bansari Mayur Kamdar, Sruthi Shankar and Amal S in Bangalore, David French in New York, French version Jean-Michel Bélot)
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