US Stocks Waver as Investors Weigh Earnings – Wall Street Journal

U.S. stocks wobbled Friday, with major indexes heading toward weekly losses following one of the busiest periods of the first-quarter corporate earnings season.

The Dow Jones Industrial Average fell 68 points, or 0.3%, to 24254, erasing its gains from earlier in the session. The S&P 500 edged down 0.1% and the Nasdaq Composite lost 0.2%.

Stocks had struggled for traction at the start of the week, pressured by selling in government bonds that sent the yield on the 10-year U.S. Treasury note above 3% for the first time since January 2014.

A string of mixed earnings reports also weighed on the stock market, with industrial bellwether Caterpillar sliding after the firm cautioned that its first-quarter results could prove to be the “high-water mark” for the year, and Alphabet shares tumbling on investor concerns about its ramp-up in expenses.

Yet strong results Thursday from a number of technology giants helped the Nasdaq end a five-session losing streak, chipping away at the losses major indexes accumulated earlier in the week.

A Wall Street street sign hangs in front of the New York Stock Exchange on Wednesday.


Photo:

Michael Nagle/Bloomberg News

Facebook shares rose 0.3% Friday, extending a post-earnings rally, while Amazon.com—which reported results after the closing bell Thursday—jumped 4.2% after posting its best revenue growth in more than six years.

With more than half of S&P 500 firms having posted first-quarter results, the broad index is on track to post year-over-year earnings growth of 23% for the latest quarter, according to FactSet estimates, helping reassure investors that corporate profits remain on solid footing.

“We’ve seen Facebook and Amazon really deliver on the earnings side, and that’s been a counterbalancing force there after the fear of regulation weighed that sector down,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.

Elsewhere, European stocks wavered between small gains and losses, with the Stoxx Europe 600 recently trading flat for the day.

Shares of Airbus jumped 1.5%, erasing initial declines, after the European plane maker cut production plans for its long-range A330 jet, but confirmed plans to deliver around 800 airliners this year.

Meanwhile, Asian stocks rose as the leaders of North and South Korea agreed to pursue a peace agreement and called for restarting reunions of families separated by the Korean War—marking a historic step for the two countries.

The summit between North Korean leader

Kim Jong Un

and South Korean President

Moon Jae-in

“is a good step forward,” said

James Cheo,

senior investment strategist at Bank of Singapore. But he added that it was too early to tell whether it would have a lasting impact on resolving tensions between the countries.

Japan’s Nikkei Stock Average and South Korea’s Kospi index added 0.7% apiece.

In bond markets, U.S. Treasury prices rose Friday, with the yield on the benchmark 10-year Treasury note recently trading at 2.968%, according to Tradeweb, compared with 2.990% Thursday and a multiyear high of 3.026% Wednesday.

Many analysts had attributed the return of volatility in the stock market this year to the rise in bond yields, which they say reflects investor bets on inflation nudging higher.

“Equity markets have been very highly priced, and everything really for the past few years has been predicated on very low bond yields and liquidity injections from central banks,” said

Jon Day,

fixed-income portfolio manager at Newton Investment Management. “That’s being pulled away, so you’re likely to see things being repriced. But there’s a case that everything’s more rational now.”

Write to Akane Otani at akane.otani@wsj.com and Mike Bird at Mike.Bird@wsj.com