Nasdaq ends higher while investors digest yields, earnings
Verizon down after missing Q3 revenue estimates
GE Aerospace drops as supply constraints drag on revenue
General Motors up after Q3 results beat estimates
Updated at 4pm ET/8pm GMT
By Lisa Pauline Mattackal, Purvi Agarwal and Carolina Mandl
Oct 22 (Reuters) -The tech-heavy Nasdaq gained ground onTuesday to end a choppy session up as Treasury yields retreated and investors awaited more earnings to assess the health of American companies.
"The last couple of days, the market has been trying to digest the move in treasuries as you've had a pretty big backup in yields. So the relative calm today in the treasury market brought a little bit of ease," Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions.
According to preliminary data, the S&P 500 .SPX lost 2.89 points, or 0.05%, to end at 5,851.09 points, while the Nasdaq Composite .IXIC gained 32.38 points, or 0.17%, to 18,572.38. The Dow Jones Industrial Average .DJI fell 6.18 points, or 0.01%, to 42,925.42.
Almost half of the S&P sectors was in the positive territory, with the consumer staple .SPLRCS leading the pack.
The change in the Nasdaq direction came after the benchmark 10-year note yields US10YT=RR earlier reached 4.222%, the highest since July 26, as investors reassessed expectations for the Federal Reserve's policy trajectory. But yields dialed back.
"The big story overall is the rates back up and the concerns that the Federal Reserve made a policy error by moving too aggressively in September. That's feeding through to a rate sell off on a global basis," said Michael Green, portfolio manager at Simplify Asset Management.
On the corporate front, GE Aerospace GE.N slumped despite raising its profit forecast for 2024, as persistent supply constraints impacted its revenue. It pulled the broader Industrials index .SPLRCI lower.
Overall the broader technology sector .SPLRCT was up after Treasuries retreated. Microsoft MSFT.O jumped.
"During the earnings season, you often get this kind of choppiness, but there's also increased uncertainty relative to the interest rate direction," said Chuck Carlson, CEO at Horizon Investment Services.
The next few weeks are likely to be volatile for equity markets, as investors scrutinize company earnings, fresh economic data and results of the U.S. election, followed by a central bank meeting.
Traders are pricing in a 91% chance of a 25-basis-point interest-rate cut in November, according to CME's FedWatch.
Among other earnings, Verizon VZ.N fell as the telecom giant missed estimates for third-quarter revenue.
3M MMM.N slipped, reversing its premarket gains, despite raising the low end of its full-year adjusted profit forecast.
Meanwhile, General Motors GM.N leapt after the legacy carmaker's third-quarter results beat Wall Street estimates, while Lockheed Martin LMT.N dipped after results.
Rate-sensitive homebuilding stocks slipped, with the PHLX Housing index .HGX dropping, dragged down by a fall in shares of PulteGroup PHM.N despite the company beating profit and revenue estimates.
"The earnings themselves have been pretty good, it's just the companies highly sensitive to interest rates are probably going to find a bit of headwind right now as investors sort out the whole interest rate story," Carlson said.
Baker Hughes BKR.O and Texas Instruments TXN.O are scheduled to report earnings after the bell.
U.S. Stocks, Bonds, and the Fed https://tmsnrt.rs/3A5Uqr2
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai, Shounak Dasgupta, Maju Samuel and Aurora Ellis
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