The stock market reversed lower Thursday at midday as strong earnings results from Tesla (TSLA) and the travel and airline industries fueled stocks. Jobless claims rose more than expected.
The Nasdaq erased early gains to trade 0.4% lower. The S&P 500 was down 0.2% after rising more than 1%. The Dow Jones Industrial Average rose 0.1% but also gave up most gains. Small caps lagged as the Russell 2000 fell 0.8%.
Volume rose on the Nasdaq and fell on the NYSE compared with the same time on Wednesday.
U.S. Stock Market Today Overview
|Last Update: 12:18 PM ET 4/21/2022|
Jobless Claims Rise As Stock Market Watches Powell Speech
Initial claims for jobless benefits last week of 184,000 were basically unchanged from the previous week’s revised total of 186,000. Economists surveyed by Econoday had forecast 175,000. The higher-than-expected numbers dampened economists’ views of a tighter job market.
Meanwhile, investors also turned their attention to Fed Chairman Jerome Powell’s speech.
Powell gave opening remarks at a conference this morning and was scheduled to speak at 1 p.m. ET at an International Monetary Fund panel. Investors are keenly watching for signs of the Fed’s next move on interest rates.
The yield on the 10-year Treasury rose 3 basis points to 2.94% at midday.
Tesla beat Wall Street expectations with a 246% surge in first-quarter earnings to $3.22 a share and an 81% jump in sales to $18.76 billion. The company is slowly reopening its plant in Shanghai after a three-week shutdown.
Tesla Jumps On Earnings, Guidance
Tesla jumped more than 6%, erasing even heavier gains, after the company reported better-than-expected first-quarter earnings. The stock is nearing the 1,152.97 buy point of a cup-with-handle base.
In an earnings call with investors, CEO Elon Musk said he expects Q2 production will be similar to Q1, maybe slightly lower. “We might be able to pull a rabbit out of the hat and be slightly higher,” he added. Musk also said he has lined up $46.5 billion to fund his hostile takeover bid for Twitter.
United Airlines (UAL), American Airlines (AAL), and Alaska Air (ALK) all rallied after the carriers gave bullish outlooks on travel demand despite mixed Q1 results.
United Airlines climbed 11.7% to a five-month high. The company narrowed its Q1 loss to $4.24 per share on revenue of $7.6 billion, slightly missing analysts’ consensus estimates. The airline expects to return to profitability in the second quarter despite high fuel costs.
American Air topped expectations with a Q1 loss of $2.32 a share, a smaller loss than expected. Revenue soared 122% to $8.9 billion, above views. The company forecast Q2 revenue above Q2 of 2019, before the pandemic. American Air stock gapped up to a gain of more than 7% in heavy trading.
Alaska Air said its adjusted loss for the quarter was $1.33 a share, beating analyst expectations of a loss of $1.59 a share, according to FactSet. The company said sales rose to $1.68 billion from $797 million, above analyst expectations of $1.66 billion.
Airlines, Metals Earnings Fuel Sectors
The S&P Transportation Sector ETF (XTN) gained more than 2%. U.S. Global Jets (JETS), an ETF that tracks the industry, gapped up more than 5% in big volume.
In the metals industry, Nucor (NUE) and Steel Dynamics (STLD) beat Q1 earnings estimates and gave guidance for record profits in Q2. Alcoa (AA) beat earnings estimates but also gave an outlook that was tempered by higher costs and lower production.
Nucor and Steel Dynamics soared more than 9% to new highs, while Alcoa dropped more than 12%. Both steel and aluminum prices have surged since Russia’s Feb. 24 invasion of Ukraine amid high natural gas prices and supply disruptions.
Nucor earnings grew 147% from a year ago to $7.67, 37 cents ahead of estimates. Revenue rose 49% to $10.49 billion, edging past views.
Steel Dynamics earnings per share surged 187% to $6.02, beating by 36 cents. Revenue grew 57% to $5.57 billion vs. estimates of $5.32 billion.
Alcoa earnings per share jumped 287% to $3.06, 13 cents ahead of views. Revenue grew 15% to $3.293 billion, shy of $3.45 billion estimates.
Dow component Verizon (VZ) broke out of a cup-with-handle base in heavy trading ahead of Friday morning’s earnings report.
Also in the industrials, Dow Inc. (DOW) shot up more than 4% after the specialty chemicals company beat first-quarter sales and profit estimates. The stock is now extended from the 65.04 buy point of a long cup-with-handle base.
The Innovator IBD 50 ETF (FFTY) reversed lower to a loss of 1.7% at midday.
Follow Michael Molinski on Twitter @IMmolinski
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