The benchmark S&P 500 closed slightly higher in choppy trading on Wednesday, as investors weighed an uptick in Treasury yields amid positive corporate results, particularly from technology giants. Canada’s TSX ended in negative territory, pulled lower by slumping railway shares and other interest rate sensitives.
An auction of a record US$70 billion worth of five-year U.S. Treasury notes on Wednesday helped to push bond yields higher and weighed on equities. The benchmark 10-year U.S. Treasury note yield rose five basis points to 4.6459%. Canadian bonds took their cue from U.S. markets, with the five-year domestic bond yield rising to 3.86%, its highest level since early November.
“Markets looks pretty good right now, but the big backdrop that everyone’s still concerned about is bond yields,” said Greg Taylor, chief investment officer at Purpose Investments.
Still, the Bank of Canada is expected to begin cutting interest rate ahead of the Federal Reserve as a slowdown in the domestic economy helps cool inflation.
Data showed on Wednesday that Canadian retail sales fell 0.1% in February, the second straight month of declines, led by a drop in sales at gasoline stations and fuel vendors.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 138 points, or 0.6%, at 21,873.72, its first decline in six sessions.
Shares of Canadian National Railway fell 4.8% after the company’s first-quarter revenue missed analysts’ estimates. Canadian Pacific Kansas City also missed estimates. Its shares were down 6.3%.
The industrials sector, which includes railroad stocks, lost 2.9% and the communication services sector ended 1.4% lower.
Rogers Communications topped estimates for first-quarter wireless subscriber additions. Still, its shares fell 3.3%. Heavily-weighted financials also lost ground, falling 0.6%.
On Wall Street, investors were focused on quarterly earnings from companies, especially from megacap growth stocks. Shares of Meta Platforms fell 11% in extended hours trading after the tech giant reported that its capital expenditure could reach up to US$40 billion in 2024, even as its first quarter revenue beat estimates.
Microsoft and Alphabet are scheduled to report their results later this week.
Tesla jumped 12% after the electric vehicle maker’s plans to boost production and roll out more affordable models overshadowed its weak quarterly results.
The S&P 500 gained 1.08 points, or 0.02%, to 5,071.63 and the Nasdaq Composite gained 16.11 points, or 0.10%, to 15,712.75. The Dow Jones Industrial Average fell 42.77 points, or 0.11%, to 38,460.92.
Markets are eyeing first quarter gross domestic product data on Thursday and personal consumption expenditures (PCE) for March on Friday. Hotter-than-expected consumer price inflation report for March had pushed back expectations of when the Fed will begin cutting interest rates.
Shares of Boeing fell 2.8% after the planemaker reported its first quarterly revenue drop in seven quarters, even though the result beat analyst expectations.
Solar inverter maker Enphase Energy dropped 5.5% after projecting second-quarter revenue below analysts’ estimates.
Texas Instruments climbed 5.6% after the chipmaker forecast second-quarter revenue above analysts’ estimates. The Philadelphia Semiconductor Index closed higher as most chip stocks rallied.
Drugmaker Biogen gained 4.5% after it beat first-quarter profit expectations, while Boston Scientific rose 5.7% after the medical device maker raised its annual profit forecast.
Hasbro climbed nearly 12% after the toymaker reported a smaller-than-expected drop in first-quarter sales and handily beat profit estimates.
Declining issues outnumbered advancers by a 1.33-to-1 ratio on the NYSE. There were 80 new highs and 50 new lows on the NYSE. On the Nasdaq, 1,903 stocks rose and 2,316 fell as declining issues outnumbered advancers by a 1.22-to-1 ratio.
The S&P 500 posted 11 new 52-week highs and four new lows, while the Nasdaq recorded 55 new highs and 120 new lows. Volume on U.S. exchanges was 10.2 billion shares, compared with the 11.07 billion average for the last 20 days.
Reuters, Globe staff
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