Written by Lisa Pauline Matakkal and Purvi Agarwal
(Reuters) – The Nasdaq soared on Thursday as Tesla Inc.’s bright profit outlook lifted market sentiment despite pressure from falling other companies and rising U.S. Treasury yields.
The company’s stock soared 19%, after the EV maker reported strong third-quarter profits and surprised investors with a forecast for next year’s sales to rise 20% to 30%. was expected to increase by more than $100 billion.
The consumer staples sector rose 2.7%.
“Musk said a lot of things that investors want to hear, including a growth rate that’s twice as much as market expectations and a robotaxi schedule that’s slightly higher than expected,” said Dennis Dick, a trader at Triple D Trading. “Confidence in stock prices has returned.” People who own Tesla stock.
However, sentiment was volatile in other regions. The S&P 500 pared gains, with nine sectors in the red, weighed down by continued pressure from other earnings reports and rising U.S. Treasury yields.
The benchmark 10-year government bond yield fell slightly on the day, but remained near its highest level since late July. It rose to 4.26% in Wednesday trading, with all three major stock indexes falling.
Other mega-growth stocks reversed early gains, with Nvidia down 0.2% and Apple down 0.5%.
IBM, which fell 6.5% after missing third-quarter revenue estimates, and Honeywell, which fell 4.3% after its full-year revenue fell short of expectations, also weighed on the blue-chip Dow Jones Industrial Average.
The Dow Jones Industrial Average fell 234.37 points, or 0.55%, to 42,280.58, the S&P 500 fell 0.33 points, or 0.01%, to 5,797.09, and the Nasdaq Composite Index rose 67.23 points, or 0.37%, to 18,343.89.
Material costs fell 1.4%, pushed down by Newmont, as profits were lower than expected due to higher costs and weak production in Nevada.
Boeing also fell 2% after factory workers rejected the contract offer on Wednesday and voted to continue their strike for more than five weeks.
Stocks have fallen from record levels over the past few sessions as Federal Reserve interest rate cuts, rising Treasury yields, corporate earnings, and reassessment of bets on uncertainty surrounding the upcoming U.S. presidential election It’s falling.
But Dick said the pullback was expected. “The story is still in technology and (artificial intelligence) and that story is not going away. I would still say you need to buy the dip in technology.”
Southwest Airlines fell 3.6% after earnings after reaching an agreement with activist investor Elliott Investment Management.
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On a brighter note, UPS rose 5.2% after the company reported higher third-quarter profits due to a recovery in package volumes and cost reductions.
According to data compiled by LSEG, 78.6% of the 159 S&P 500 companies that announced financial results for this fiscal year beat analyst expectations.
On the economic front, S&P Global’s preliminary PMI data showed that US business activity increased in October on the back of solid demand. Weekly jobless claims for the week ending October 19 also unexpectedly fell.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a ratio of 1.04 to 1 and on the Nasdaq by a ratio of 1.19 to 1.
The S&P 500 index recorded 39 new highs and three new lows in 52 weeks, while the Nasdaq Composite recorded 57 new highs and 64 new lows.
(Reporting by Lisa Matakkal and Purvi Agarwal in Bengaluru; Editing by Saumyadev Chakrabarty and Pooja Desai)
