Updated at 10:05 am EST
U.S. stocks traded mixed Thursday, with better-than-expected bank earnings offsetting a disappointing reading of March retail sales, as traders track the expiry of more than a $1 trillion dollars in stock options ahead of the Easter and Passover holiday weekend.
Consumer spending slowed modestly from last month, Commerce Department data indicated, thanks in part to a record high surge in gaspoline prices that trimmed discretionary budgets.
Market attention was largely captured by billionaire Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk’s $42 billion offer to take Twitter (TWTR) – Get Twitter, Inc. Report private, which came just days after he rejected a seat on the board of the social media group.
Traders were also tracking a pullback in U.S. Treasury bond yields, which continued into the Thursday session, following Tuesday’s reading of March inflation which showed an easing in core consumer prices that suggest inflation may have reached its peak with the the highest headline rate since 1981.
Benchmark 10-year note yields have fallen around 20 basis points from the three-year peak of 2.84% they reached prior to the Tuesday reading, and were last seen at 2.755% in early New York trading.
Bank earnings were also be in focus today, with updates from Goldman Sachs (GS) – Get Goldman Sachs Group, Inc. Report, Morgan Stanley (MS) – Get Morgan Stanley Report, Wells Fargo (WFC) – Get Wells Fargo & Company Report and Citigroup (C) – Get Citigroup Inc. Report all expected prior to the opening bell, following yesterday’s softer-than-expected first quarter profit report from JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report.
S&P 500 companies are expected to see collective profits grow 6.1% from last year to a share-weighted total of $432.2 billion, according to Refinitiv data, a pace that would be down sharply from the 32.1% clip recoded over the final three months of last year.
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Further market volatility may come later today from the expiration of around $1.5 trillion in equity options, including nearly $500 billion linked to single stock exposures and around $980 million tied to the S$P 500.
Elsewhere, global oil prices eased modestly in overnight trading, with WTI crude futures falling $1.618 to $103.07 per barrel, following a bigger-than-expected increase of 9.4 million barrels in domestic crude stocks reported yesterday by the energy department.
In Europe, the region-wide Stoxx 600 rose 0.75%, while largely tracking moves in the U.S., following the European Central Bank’s latest policy meeting, which plotted out a more detailed path in terms of unwinding its pandemic-era stimulus, but isn’t likely to signal any rate increases until later in the fall.
On Wall Street, the Dow Jones Industrial Average gained 170 points in the opening minutes of trading while the S&P 500, which is down 2% for the month, fell seven points. The tech-focused Nasdaq gave back 85 points from last night’s close.
UnitedHealth Group (UNH) – Get UnitedHealth Group Incorporated Report shares hit a fresh record high, boosting the Dow, after it posted better-than-expected first quarter earnings, while lifting its full-year profit forecast, as revenues from its healthcare solutions division Optum paced topline gains.
Citigroup (C) – Get Citigroup Inc. Report posted stronger-than-expected first quarter earnings, sending its shares up 1.5%, as fee income partly offset the deal-making slump that has loped profits from investment banking group across Wall Street.
Goldman Sachs Group (GS) – Get Goldman Sachs Group, Inc. Report, meanwhile, added 1.9% as global markets revenues offset a slump in deal-making fees amid sharp decline in merger activity and produced a firmer-than-forecast top and bottom line.
Apple (AAPL) – Get Apple Inc. Report shares edged amid reports that shipments of some of the tech giant’s key products could be delayed as a results of plant closures and production delays linked to China’s Covid surge.
Bloomberg reported late Wednesday that U.S. consumers will face delays in receiving the flagship MacBook Pro laptop as China struggles to control its recent outbreak and defends its ‘zero Covid’ policies that have shuttered plants and factories, while locking down entire cities, over the past few weeks.