4:05pm: Stocks head higher at the close
US stocks headed higher at the close as investors appeared to shake off worries about higher interest rates.
At 4pm, the Dow had crossed the 33,000-point mark to close at 33,004 for a 1.1% gain, the S&P 500 was up 0.8% at 3,981 and the Nasdaq finished at 11,463 for a 0.7% gain.
That said, investors were keenly focused on rates. The yield on the 10-year Treasury note ended north of 4%, its highest level since November.
Wall Street is preparing for more aggressive action from the Federal Reserve in the coming months as inflation stays elevated and the economy remains strong.
12:09pm: 10-year Treasury yield rate passes 4%
At midday, the Dow was up 97 points, 0.3%, to 32,759, while the Nasdaq Composite fell 60 points, 0.5%, to 11,320 and the S&P 500 shed 8 points, 0.2%, to 3,943.
Despite the Dow's gain, buoyed by Salesforce.com surging, the major indexes are all on pace for a losing week.
Investors are watching rising Treasury yields very closely. The benchmark 10-year note yield is trading above 4%, and the 2-year note yield reached levels not seen in more than a decade.
“Eurozone inflation data has sparked another bout of upside for treasury yields, with the expectation of higher for longer rates bringing downward pressure for equities," said Joshua Mahony, senior market analyst at online trading platform IG.
"The Nasdaq once again finds itself under pressure thanks to lofty valuations and the potential for an economic downturn to dent future growth prospects. However, a decline in the latest US initial jobless claims does continue the theme of strength in the jobs market. Nonetheless, it is a double edged sword, with the economic outperformance likely to keep inflation high, while also allowing the Federal Reserve free reign to raise rates further. ”
9:40am: Salesforce surge boosts Dow Jones
US stocks opened mixed on Thursday with investors weighing up the latest corporate earnings as treasury yields top 4%.
Just after the market opened, the Dow Jones Industrial Average had added 17 points or 0.1% at 32,668 points, buoyed by Salesforce which had jumped 13.5% on its upbeat quarterly results.
The S&P 500 and the Nasdaq Composite, on the other hand, had shed 0.6% and 0.9% to sit at 3,930 points and 11,283 points respectively.
Tesla Inc shares fell 7.7% at the open after the electric vehicle maker’s highly anticipated Investor Day underwhelmed, being long on vision and short on details.
Meanwhile, initial jobless claims for last week dipped to 190,000 from 192,000, below the consensus expectation of 195,000.
Economists at Pantheon Macroeconomics commented that claims remain very low and range-bound, though they appear to have bottomed, and that they see a decent chance of a clear increase next week thanks to the severe weather across the upper Midwest and California.
“More broadly, we expect to see claims rising sharply in the spring, lagging the surge in layoff announcements captured by the Challenger survey,” the economists said.
"The lag arises because firms tend to announce layoffs all at once but then implement the cuts over a few months, and also because people receiving severance pay in some states, notably California, cannot make an unemployment insurance claim. The likely future direction of travel for claims is clear."
6.30am: Choppy start to the month for equities
Wall Street is expected to open mixed after March got off to a rough start yesterday as the latest ISM data did little to quell concerns that the Federal Reserve’s Open Market Committee (FOMC) may resume more aggressive interest rate hikes when it meets later this month to return inflation to targeted levels.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.2% in Thursday pre-market trading, while those for the broader S&P 500 index shed 0.4%, and contracts for the Nasdaq-100 sank 0.5%.
The DJIA ended Wednesday almost unchanged at 32,662, but the Nasdaq dropped 0.7% to 11,379 and the S&P 500 fell 0.5% to 3,951, its lowest level in over a month.
While the ISM manufacturing print for February remained in contraction territory at 47.7, the Prices Paid sub-component expanded to 51.3, above the 46.5 the market expected.
Meanwhile, Federal Reserve officials Neel Kashkari and Raphael Bostic said more aggressive interest rate hikes may be necessary to slow inflation, with Bostic adding that the Fed needs to raise its policy rate by 50 basis points to a range of 5% to 5.25% and “leave it there well into 2024.”
“ISM data left Wall Street closing on a whimper, markets are increasingly pricing a higher terminal rate for the US rate cycle, compounded by hawkish rhetoric from Fed members Bostic and Kashkari, both of whom remarked that a 5%+ terminal rate is required to quash inflation,” commented TickMill Group market analyst Patrick Munnelly. “Kashkari specifically stated that services inflation was a primary concern and required real attention, as such the US 10yr yield tipped 4%, with markets pricing a further 75bp rise by the FOMC this year.”
On the corporate front, Salesforce’s shares surged in after-hours trading following quarterly results that beat expectations, noted Neil Wilson, chief markets analyst at markets.com.
“The company also expanded its share buyback programme and delivered a forecast that was better than most had hoped for,” Wilson added. “Shares rose 16% in the after-hours market after it posted adjusted earnings of $1.68 per share versus $1.36 expected.”
Companies reporting quarterly results today include Costco, AB InBev, Merck, Kroger, Dell Technologies and Hewlett Packard.