US stocks fall; investors eye Elon Musk's offer for Twitter

Stocks are closing lower on Wall Street Thursday as investors gave mixed reviews to earnings from four of the nation's largest banks.

The S&P 500 fell 1.2 per cent and ended a shortened trading week with a decline of more than 2 per cent. The yield on the 10-year Treasury rose to 2.83 per cent as inflation worries continue to overhang the markets. Investors again turned their attention to the drama surrounding Tesla CEO Elon Musk and Twitter.

Musk offered to buy the social media company for $54.20 a share, two weeks after revealing he'd accumulated a 9 per cent stake. The Commerce Department said retail sales rose 0.5 per cent in March.

Stocks fell and bond yields rose on Wall Street Thursday, as investors reviewed the latest economic data and corporate earnings amid lingering concerns about inflation and rising interest rates.

The S&P 500 fell 1 per cent as of 3:44 p.m. Eastern, on pace for its second straight weekly loss. The Dow Jones Industrial Average fell 16 points, or 0.1 per cent, to 34,538 and the Nasdaq fell 1.9 per cent.

Technology stocks led the way lower, offsetting gains elsewhere in the market. Pricey valuations for many of the bigger technology companies give them more sway in directing the broader market higher or lower. Microsoft fell 2.4 per cent.

Retailers and other companies that rely on consumer spending also weighed on the market. Amazon fell 2.5 per cent. Energy stocks rose along with the price of crude oil. Exxon Mobil rose 1.5 per cent.

The selling amid higher oil prices and rising bond yields suggests that investors remain worried about inflation, the war in Ukraine and the Federal Reserve's moves to raise interest rates, said Sam Stovall, chief investment strategist at CFRA.

With the US stock market closed for Good Friday, traders are also eager to minimize risk.

“It's a long weekend that people don't want to be overly exposed to,” Stovall said.

Investors again turned their attention to the drama surrounding Tesla founder and CEO Elon Musk and Twitter. Musk offered to buy the social media company for $54.20 a share, two weeks after revealing he'd accumulated a 9 per cent stake.

Musk has criticized Twitter for not living up to free speech principles and said, in a regulatory filing, that it needs to be transformed as a private company. Twitter's stock was down 1.9 per cent at $44.96, well below Musk's offering price.

Wall Street had mixed economic data to review following several hot inflation reports earlier in the week. The Commerce Department said retail sales rose 0.5 per cent in March, boosted by higher prices for gasoline, as consumers continue to spend despite high inflation.

Inflation remains at its highest levels in 40 years in the US and that has economists and analysts closely watching how consumers react to higher prices on everything from food to clothing and gasoline. Concerns about inflation have worsened amid Russia's invasion of Ukraine, which has made for more volatile energy prices and contributed to rising oil and wheat prices globally.

US crude oil prices reversed an early decline Thursday and settled 2.6 per cent higher.

The head of the International Monetary Fund warned Thursday that Russia's war against Ukraine was weakening the economic prospects for most of the world's countries and reaffirmed the danger high inflation presents to the global economy.

Rising prices are driving the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help cool the surging demand that is contributing to the problem.

Bond yields have been mostly on the rise as Wall Street prepares for higher interest rates. The yield on the 10-year Treasury rose to 2.83 per cent from 2.72 per cent late Wednesday.

Investors received another update on the recovery in the jobs market. The number of people seeking unemployment benefits ticked up last week, according to the Labor Department, but remained at a historically low level. The data reflect a robust US labor market with near record-high job openings and few layoffs.

Earnings season is underway and Thursday featured reports from insurer UnitedHealth Group and several banks.

UnitedHealth rose 0.1 per cent after reporting solid first-quarter results and raising its 2022 forecasts.

Investors had mixed reactions to results from four of the nation's largest banks, all of which reported noticeable declines in their first-quarter profits as the volatile markets and war in Ukraine caused deal-making to dry up while a slowdown in the housing market meant fewer people sought mortgages.

Citigroup rose 1.9 per cent while Wells Fargo fell 4.2 per cent. Morgan Stanley rose 1 per cent and Goldman Sachs was flat.

Investors are closely watching the latest round of corporate earnings to determine how companies have been dealing with rising costs and whether consumers have pulled back their spending.

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