U.S. stocks slide as rising bond yields hit growth stocks

NEW YORK  (April 15) - Wall Street closed lower on Thursday at the end of a holiday-shortened week as bond yields resumed their uphill climb and investors contended with mixed earnings and economic data.

All three major U.S. stock indexes posted weekly losses ahead of the Good Friday holiday.

"It’s a combination of continued worries still there," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "It's a mixed bag earning season so far, and that, coupled with high inflation and the hawkish Fed have led to selling ahead of the holiday weekend."

Rising 10-year Treasury yields pressured growth stocks, dragging the S&P 500 and the Nasdaq deeply into negative territory, while the Dow posted a more modest loss.

"The higher yields pressure higher growth stocks as their net present value ... takes a hit when yields go higher," Detrick said.

A quartet of large U.S. banks shifted the first quarter reporting season into overdrive, with Goldman Sachs Group Inc (GS.N), Citigroup Inc (C.N), Morgan Stanley (MS.N), and Wells Fargo & Co (WFC.N) all posting results. read more

While all four beat Street estimates, they also reported steep profit declines. Their share price reaction was mixed, and were last moving in the range of up 1.6% (Citigroup) to down by 4.5% (Wells Fargo). The broader S&P 500 Finance index fell 1.0%.

"There’s some concerns this earnings season," Detrick added. "Expectations are the lowest since the recovery started and it's got investors cautious of how companies will step up to the earnings altar in the comings weeks."

A host of economic data showed spiking gasoline prices helped retail sales beat consensus and prompted the largest jump in import prices in nearly 11 years. 

REUTERS