Investing.com — The Dow Jones closed sharply lower on Wednesday, driven by higher Treasury yields and weaker industries as airline stocks fell sharply on concerns about demand after American Airlines Inc. cut its second-quarter earnings guidance.
At 16:00 EDT (20:00 GMT), it was down 411 points or 1.1%, down 0.8%, and down 0.6%.
Industrials, energy stocks lead to the downside
Airline stocks greatly influenced industrial companies after that American Airlines Group (NASDAQ:) lowered its second-quarter earnings guidance, sending its shares down more than 13%.
The downgrade guidance prompted some on Wall Street to turn bearish amid concerns that U.S. airlines are struggling to keep up with competition from low-cost and ultra-high-cost carriers.
“AAL's revenue challenges are likely to persist beyond this summer given the escalation in growth of ultra-low-cost carriers in its major hubs,” Seaport Research Partners said in a note on Wednesday, as it lowered its earnings forecast and downgraded US Airways shares to neutral from buy. .
Delta Air Lines (NYSE:), and Spirit Airlines (NYSE:) was also trading lower.
Meanwhile, a decline in energy stocks also weighed on the broader sector, offsetting the jump Marathon oil Corporation (NYSE:) after ConocoPhillips (NYSE:) agreed to be acquired in an all-stock deal valued at $17.1 billion.
US Treasury yields continue to rise ahead of personal consumption expenditures data
Treasury yields continued to rise after a series of weaker-than-expected auction results, indicating weak demand for government bonds including $44 billion in 7-year bonds sold on Wednesday.
The move comes as Treasury yields rise ahead of key inflation data this week. The data, the Fed's preferred measure of inflation, is due on Friday, and is likely to take into account the central bank's expectations for interest rates.
Signs of steady inflation have prompted several officials to signal in recent days that they would like to see more evidence of falling prices before starting to cut interest rates from their highest levels in more than two decades.
Salesforce due for earnings report; Dick's Sporting Goods quickly jumped and increased
Quarterly corporate earnings season is gradually coming to an end, but Salesforce (NYSE:) is still scheduled to report its fiscal first-quarter earnings after the bell, and Wall Street will likely be looking for updates on the business software group's Data Cloud division.
Dick's Sporting Goods (NYSE:) stock rose more than 15% after the retailer raised its full-year guidance after customers spent more on new sneakers and sports equipment at its big-box stores.
Robinhood in $1 billion stock buyback plan, BHP walks away from Anglo deal
Trading platform Robinhood (NASDAQ:) rose 3% after revealing a $1 billion stock buyback.
BHP Group Ltd ADR (NYSE:) closed the jump below the flat line after it decided to end its takeover plans of rival Anglo American (JO:) after the latter refused to extend talks beyond the May 29 deadline.
(Peter Nourse and Ambar Warrick contributed to this article.)
