Tech stocks slide as bond yields spike, GameStop soars
U.S. equity markets were little changed Thursday morning as traders weighed continued improvement of the U.S. economy and a sharp rise in bond yields.
The Dow Jones Industrial Average was up 31 points, or 0.1%, while the S&P 500 and Nasdaq Composite were lower by 0.32% and 0.61%, respectively. Any gains for the Dow would add to Wednesday’s record close just below the 32,000 level.
Durable goods orders excluding transportation rose 1.1% month over month in January, exceeding the 0.7% growth that analysts surveyed by Reinfitiv were anticipating, and initial jobless claims fell to 730,000 last week from a downwardly revised 841,000 the week prior.
FILE - In this photo illustration, the stock market information of GameStop Corp displayed on a smartphone in front of GameStop logo.
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Meanwhile, a second estimate for fourth-quarter gross domestic product showed the U.S. economy expanded at a robust 4.1% annual pace, up from the initial 4% print.
Signs of an improving economy have helped boost the 10-year yield by more than 8 basis points to above 1.46%, its highest level in a year.
This as the House of Representatives readies for a vote, possibly Friday, on President Biden’s $1.9 trillion COVID-19 relief package.
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In stocks, GameStop Corp. shares continued to soar after doubling on Wednesday following news that Chief Financial Officer Jim Bell was forced out by Ryan Cohen, the founder of online pet food supplier Chewy, whose venture capital firm has amassed an almost 10% stake. The New York Stock Exchange prompted one trading halt shortly after the open due to volatility.
Other stocks that were recently subject to short-squeezes, including Bed Bath & Beyond Inc., AMC Entertainment Holdings Inc. and Koss Corp. were also trading sharply higher.
Elsewhere, Tesla Inc. informed workers that it will temporarily halt production of its Model 3 sedan at its Freemont, California, plant, Bloomberg reports, citing a person familiar with the matter.
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In earnings, Best Buy Co. reported mixed quarterly results and warned that comparable sales could fall as much as 2% in the current fiscal year as demand slows from pandemic-induced levels.
Anheuser-Busch InBev posted better-than-expected earnings and revenue, but margins were pressured as the company used more higher-priced single-use cans as at-home consumption increased during the pandemic.
Domino’s Pizza missed on earnings and revenue as same-store sales growth slowed to 11.2% from 17.5% in the prior quarter. The pizza chain projects global retail sales growth of 6% to 10% over the next two to three years.
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In commodities, West Texas Intermediate crude oil slid 35 cents to $62.87 per barrel while gold fell $18.60 to $1,779.30 an ounce.
European markets were trading mixed with Britain’s FTSE 100 up 0.31%, France’s CAC 40 higher by 0.11% and Germany’s DAX 30 down 0.1%.
In Asia, China’s Shanghai Composite index rose 0.59%, Hong Kong’s Hang Seng index advanced 1.2% and Japan’s Nikkei 225 gained 1.67%.