NEW YORK, Oct 19 — Wall Street’s main stock indexes edged up today as Tesla and Netflix kicked the US earnings season into high gear, while Treasury yields eased off session highs ahead of remarks from Federal Reserve Chair Jerome Powell.
Netflix soared 14.5 per cent after the world’s No. 1 streaming company by subscriber count said it was raising prices for some of its plans in the United States, Britain and France after adding 9 million users in the third quarter.
Tesla, however, slid 6.5 per cent as the electric-vehicle (EV) maker missed Wall Street estimates for third-quarter gross margin, profit and revenue.
CEO Elon Musk said yesterday he was concerned about the impact of high interest rates on car buyers, adding that the EV maker was hesitant about its plans for a factory in Mexico.
Third-quarter earnings for S&P 500 companies are now estimated to grow at 1.6 per cent compared with expectations of a 2.2 per cent increase last week, LSEG data showed.
Yields on benchmark Treasury notes slipped from session highs, but the 2-year yield, which best reflects short-term interest rate expectations, was still at a 17-year peak at 5.2249 per cent, while that on the 10-year note stood at 4.9407 per cent, near the 5 per cent level last seen in 2007.
“Is the 10-year going to breach 5 per cent in yield... I think the answer to that is yes, that it can in turn provoke even more volatility,” said Russell Hackmann, President of Hackmann Wealth Partners.
“That’s a psychologically important issue that maybe could trigger a real sell off in stocks... you got a jittery market out there.”
Powell is scheduled to speak at 12 pm ET, while other Fed officials including Chicago Fed President Austan Goolsbee, Atlanta’s Raphael Bostic and Philadelphia’s Patrick Harker will speak later in the day.
Stoking higher-for-longer interest rate concerns, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting another month of strong job growth.
At 9.37am ET, the Dow Jones Industrial Average was up 16.02 points, or 0.05 per cent, at 33,681.10, the S&P 500 was up 3.10 points, or 0.07 per cent, at 4,317.70, and the Nasdaq Composite was up 19.44 points, or 0.15 per cent, at 13,333.74.
Communications services and information technology led gains amongst the major S&P 500 sectors.
Six of the 11 S&P sub-sectors were down, with energy and real estate among the top decliners.
On the earnings front, Blackstone slipped 4.8 per cent as the world’s largest private equity firm’s third-quarter distributable earnings fell more than expected due to a decline in asset sales in its real estate business.
Lam Research fell 3.7 per cent as the chip-manufacturing equipment supplier forecast second-quarter revenue slightly below Wall Street estimates.
Las Vegas Sands rose 4.3 per cent following the casino operator’s better-than-expected third quarter profit and revenue.
AT&T added 6.1 per cent after the telecom firm raised its annual free cash flow forecast.
Declining issues outnumbered advancers by a 2.13-to-1 ratio on the NYSE and by a 1.55-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and 22 new lows, while the Nasdaq posted five new highs and 114 new lows. — Reuters
