- Stocks fell in early trading Wednesday, with tech stocks among the worst performers once again.
- Twitter reversed a premarket surge it had achieved after reporting its second profitable quarter in company history.
- The sell-off continued as the 10-year yield traded above 3%.
Stocks started Wednesday weaker for a second straight day, with tech companies once again among the biggest losers in the market.
The most notable tech mover has been Twitter, which reversed premarket gains and fell by as much as 6% on Wednesday even after topping analyst expectations while reporting its second quarterly profit in company history.
At 10:13 a.m. ET, the Nasdaq was down 53 points, or 0.8%, the Dow Jones industrial average was down 122 points (0.5%), and the S&P 500 was down 14 points (0.5%).
The sell-off extended as the 10-year yield traded up 3 basis points at 3.013%. The closely watched benchmark of borrowing costs rose above 3% on Tuesday for the first time since 2014. Higher bond yields prompt investors to rethink the attractiveness of stocks, which are much riskier.
Most of the S&P 500 companies that have announced first-quarter earnings results have topped analysts’ expectations. But Caterpillar, often seen as a bellwether for the global economy, raised investors’ eyebrows on Tuesday when it said its strong first-quarter results marked a “high-water mark” for the year.
“Ironically, that has created some concern among investors that, so far, earnings season’s really shaping up to look really good,” said Bob Landry, the chief investment strategist at United Capital, which oversees $US21.6 billion in assets. “Is this as good as it gets?”
Investors will be closely watching Facebook’s earnings results later Wednesday to gauge whether there’s been a user backlash after its data scandal.
“The threat of additional regulation on some of these firms is obviously still very much something that we need to aware of because that could raise costs for them,” Landry told Business Insider.
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