S&P 500 slides on Tesla slump, economic jitters By

By Yasin Ebrahim

-- The trfx foreign exchange is how nowS&P 500 slipped Thursday as investor sentiment was soured by disappointing quarterly results including from Tesla and economic data pointing to a slowing economy.

The fell 0.7%, the fell 0.5%, or 162 points, and the fell 0.8%.

Tesla (NASDAQ:) fell 10% after the electric vehicle maker reported earnings that Wall Street expectations as margins were dragged lower by a recent string of price cuts.

The concerns over margins intensified after the chief executive Elon Musk touted more cost cuts to boost sales, forcing some cautious commentary from Tesla bull Wedbush.

“[W]e remain very bullish on the Tesla story, however, this margin compression and price cut narrative must be carefully managed over the coming quarters as it now emerges as a clear overhang on the stock,” Wedbush said in a note after cutting its price target on the stock to $215 from $225.

Tesla’s willingness to sacrifice margins for long-term demand gain stoked fears of a price war in the industry, pushing other automakers including General Motors Company (NYSE:) and Ford Motor Company (NYSE:) more than 3% lower.

In tech, International Business Machines (NYSE:) traded above the flatline after reporting and announcing that it had teamed with (NASDAQ:) to advance mRNA research.

Semiconductor stocks traded roughly unchanged as investors weighed up a surge in (NASDAQ:) on better-than-expected and a slump in Seagate Technology PLC (NASDAQ:) following a quarterly report that on both the top and bottom lines.

AT&T Inc (NYSE:), a major Dow component, slumped more 10% amid concerns about the company’s ability to meet its guidance and mixed quarterly showing a revenue missed estimates.

“While we had anticipated lower FCF (free cash flow) to start the year, investors may question whether AT&T can achieve its full-year FCF guidance of $16bn+ as this will likely require significant improvements in working capital impacts for the remainder of 2023,” Goldman Sachs said in a note.  

But there were some positives on the earnings front as D.R. Horton Inc (NYSE:) and Corp (NYSE:) reported quarterly results that beat on both the top and bottom lines, with the shares trading up more than 6% and 5% respectively.

Sentiment on risk assets including stocks was also soured by data showing further weakness in manufacturing and an uptick in .

The Philadelphia Fed said Thursday its fell to a reading of -31.3 in April, from -23.2 in March.

The weaker data stoked worries about a deeper slowdown in the economy at a time when the Federal Reserve continues to lean toward further rate hikes.

“The bigger risk now is that the Fed squeezes so hard that wage growth slows too far next year,” Pantheon Macroeconomics said in a note.

Echoing some of her Fed peers, Cleveland Federal Reserve President Loretta Mester said she expected that interest rates would “need to move somewhat further into restrictive territory this year,” and remain higher to curb inflation.

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