The New York Stock Exchange is seen in New York on Thursday, Feb. 24, 2022. Stocks are mixed in the early going on Wall Street Monday, April 18, 2022, as traders get back to work after a holiday weekend. (AP Photo/Seth Wenig, File)
By Stan Choe and Alex Veiga
Stocks closed slightly lower after a wobbly day of trading Monday, as worries about interest rates and inflation keep a lid on Wall Street despite some better-than-expected profit reports.
The S&P 500 slipped less than 0.1%. The benchmark index was coming off its second straight week of losses. Like it, the other two major U.S. stock indexes also rolled between small gains and losses Monday. The Dow Jones Industrial Average and Nasdaq each fell 0.1%.
Among S&P 500 companies, a slide in health care, industrial and other sectors narrowly edged out gains in technology, financial, energy and other stocks.
That pulled the index 0.90 points lower to 4,391.69. The Dow, meanwhile, dropped 39.54 points to 34,411.69.
Stocks have struggled this year as the highest inflation in generations forces the Federal Reserve into a U-turn on the low-interest-rate policies that helped markets soar and the economy to rev in recent years.
The central bank has already raised short-term rates once, and investors are expecting it to raise rates by double the usual amount in a couple weeks, with more likely on the way. The Fed is also preparing investors for a sharp reversal in its massive efforts to keep longer-term rates low.
Stocks have often moved in the opposite direction of Treasury yields, and the 10-year yield is near its highest level since 2018, at 2.85% late Monday afternoon. Higher yields put downward pressure on all kinds of investments, from gold to cryptocurrencies, and the stocks seen as the most expensive tend to get hit hardest.
That puts the spotlight on big technology and high-growth stocks, the ones that screamed highest through the pandemic. The Nasdaq, home to many such stocks, has lagged the rest of the market sharply this year. The index fell 18.72 points to 13,332.36 Monday.
Smaller stocks also faltered, with the Russell 2000 index finishing down 14.85 points, or 0.7%, at 1,990.13.
Counterbalancing were some better-than-expected profit reports. Synchrony Financial climbed 6.2% after it said it earned more in the first three months of the year than Wall Street expected. It also boosted its dividend and plan to buy back its own stock.
Bank of America rose 3.4% after reporting stronger profits than analysts forecast.
They're among the first companies to tell investors how much they earned at the start of 2022, and expectations are relatively subdued. Analysts are forecasting roughly 5% growth for S&P 500 companies, the slowest since the end of 2020, according to FactSet. Much of that is because it's difficult to keep growing profits at such a high pace following a year of better than 30% growth.
But inflation may also be pulling down profits following a year of big companies' successfully passing along almost all their price increases onto their customers.
Energy producers continue to be big winners from inflation, as prices keep rising for the oil and natural gas they sell. Natural gas leaped again Monday, with the U.S. price up 7.1% and near its highest level since 2008. The war in Ukraine is pushing up demand for U.S. gas as European customers try to turn away from Russian supplies.
The price of benchmark U.S. oil, meanwhile, rose 1.2% to settle at $108.21 per barrel. Brent crude, the international standard, gained 2.7% to settle at $111.70, and that helped lift energy stocks in the S&P 500 by 1.5% for the biggest gain among the 11 sectors that make up the index.
Twitter, meanwhile, jumped 7.5% in the first trading after the company announced a plan to make it more difficult for someone to take over the company. Tesla CEO Elon Musk has said he wants to buy the social-media platform and take it private, but the company has made it tough for him to amass more than a 15% stake in it.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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