If you are a stock-market bull, you had to love Wednesday’s open. That was the best part of the day.
Stocks shot up to their highs of the day within a half-hour of the open. And spent the rest of the day giving up all of their gains.
By 10 a.m., the Standard & Poor’s 500 Index was up as much as 1.7%, the Nasdaq Composite jumped 2%, and the Dow Jones industrials were up 1.2%.
Steadily and surely, however, the gains evaporated entirely. The Nasdaq finished down 1.1% at 16,195.81. The S&P 500 was off 0.8% at 5,199.50.
The Dow’s loss was 0.6%, but the point loss was dramatic. The blue-chip index had been up as many as 480 points but ended down 234 points— a 714-point swing.
Related: Midday stock movers: Super Micro tumbles; Apple up; Tesla, Rivian down
Here’s why the market lost its mojo.
Tech stocks were weak. Super Micro Computer (SMCI) , maker of high-end servers that handle the loads generated by AI applications, reported disappointing earnings and fell a whopping 20% to $492.70. Dell Technologies (DELL) , a Super Micro Competitor, fell 7.2%. Nvidia (NVDA) dropped 5.1%. Intel fell 3.5%. Microsoft (MSFT) fell 0.3%. Apple (AAPL) , however, was up 1.3%.
Disney earnings didn’t impress. Walt Disney (DIS) shares fell 4.5% to $86.96. The company’s earnings were mixed. The entertainment giant reported the first profit ever for its Disney+ streaming service, and CEO Bob Iger sees more gains ahead. But the company said that attendance at its theme parks was softer than expected.
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Biotechs had a hard day. Dow component Amgen (AMGN) fell 5%. The Nasdaq Biotechnology Index was off 1.3%.
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Bond yields were higher. Bad for everyone, especially home buyers. The 10-year Treasury yield jumped up to 3.96% from 3.897% on Tuesday.
The culprit: An auction of 10-year notes generated higher-than-expected yields as bond investors worry about higher federal deficits no matter who is elected president in November.
The iShares 20+ Year Treasury Bond ETF (TLT) fell 0.7% to 95.91. It’s off a bit more than 4% since reaching $99.94 on Monday.
Worries about the economy. While it’s hard to find anyone sure that a nasty recession is coming, uncertainty has crept into chatter.
The immediate worry is the weekly report on initial jobless claims due Thursday. The consensus estimate is about 241,000 claims. A week ago, claims came in at 249,000 when Wall Street was looking for 236,000.
Monday hangover continues. Lastly, after Monday’s ugly slump, it takes time for stocks to stabilize. Probably more time than investors and brokerages would like.
A symptom of the unease was Wednesday’s decline. There was another signal on Tuesday when a huge rebound from Monday debacle faded by about half.
A big question is if the market will retest its Monday’s lows before it can start a real recovery. The S&P 500’s bottom on Monday was 5,119.26
Related: Veteran fund manager sees world of pain coming for stocks