Stock Market Today: Dow Slips, Tesla Drops, IBM Falls - Barron's

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Sentiment remains strong over a comeback in stocks after a tough month.

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The Dow Jones Industrial Average was lower Thursday as the stock market wrestled with concerns over earnings growth, on the one hand, and concerns about inflation on the other.

In morning trading, the Dow was down 111 points, or 0.3%, after the index climbed 152 points Wednesday to close barely short of its all-time high at 35,609. The S&P 500 —which also finished just shy of its all-time high after five consecutive sessions of gains—was down 0.1%, while the Nasdaq Composite rose 0.3%.

Investors have faced a suite of concerns over the past month ranging from the future of central bank stimulus to the impact of supply-chain disruptions on corporate profits. But a wave of strong earnings reports from companies over the past week looks to have helped markets leave those anxieties behind. Sentiment over a comeback—after the S&P 500 fell more than 5% from its high in early September to the beginning of October—remains strong.

“There are few dysfunctional worries in equities at the moment,” said Jim Reid, a strategist at Deutsche Bank . “The resurgence in risk appetite showed no sign of diminishing yesterday.”

Reid said it was “an impressive turnaround” from where the narrative was in markets a few weeks ago, as investors stressed about issues including the U.S. debt ceiling and the fate of China’s highly indebted and stressed property sector.

“Another round of positive earnings reports have swept away those anxieties,” Reid added. “This has come even as investors have become increasingly skeptical about the transitory inflation narrative, as well as fresh signs that Covid-19 might be a serious issue once again this winter.”

For now though, earnings season is taking the focus off the macro issues. Analyst Jeffrey Halley of broker Oanda added that “earnings are dominating the headlines and market sentiment, even as bond yields, energy prices, commodities and rate hike expectations around the world continue to creep higher.”

On Thursday, the Labor Department reported that initial jobless claims fell by 6,000 last week to a new pandemic low of 290,000, helping to keep bond yields elevated. The yield on the benchmark 10-year U.S. Treasury note was down slightly Thursday and holding below 1.65%.

Overseas, Hong Kong’s Hang Seng Index fell 0.5%, as Chinese investors were faced with downbeat news over the fate of heavily indebted property developer China Evergrande .

Evergrande said it had abandoned plans to sell the majority stake in its property services business and could not guarantee that the group would meet its financial obligations.

The pan-European Stoxx 600 was nearly unchanged.

Here are seven stocks on the move Thursday:

Tesla (ticker: TSLA) rose 2.9% after reporting earnings that topped analyst forecasts.

IBM (IBM) has fallen 7.7% as a sales miss trumped an earnings beat.

Equifax (EFX) has slumped 3.1% after its earnings fell short of analyst expectations.

China Evergrande (3333.H.K.) fell 12.5% in Hong Kong as investors frowned on the failed deal to sell a major stake in its property services division, as the embattled real estate giant turns to asset sales to pay down its massive debt pile.

Unilever (UL) rose 2.7% in London, with its U.S. shares up 1.2% after sales growth in the third quarter of 2.5% beat analyst expectations—as did its sales forecast.

SAP (SAP) stock rose 1.5% in Frankfurt, while the software company’s U.S. Nasdaq-listed shares were set for similar gains in the premarket, after the group confirmed its third-quarter earnings, which were prereleased on Oct. 12.

Anglo American (AAL.U.K.) fell 4.4% in London as the mining giant reported quarterly production figures, showing production rose by 2% and was on track for its full-year guidance. But copper output fell 6% amid maintenance work at a Chilean mine. Copper prices have climbed nearly 7% across the last three months.

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