Wall Street shares forfeit early gains as bond yields rise

By Stephen Culp

(Reuters) - Wall Street stocks gave up early gains on Thursday as bond yields rose and technology stocks retreated ahead of a host of high-profile earnings.

It has been a rocky week for Wall Street with mostly robust earnings met by rising bond yields as world central banks back away from easy monetary policy. The benchmark S&P 500 stock index is on track for its first weekly decline in five.

The Federal Reserve held the fed funds target rate steady on Wednesday but indicated it was concerned about inflation rising.

"Inflation on a 12-month basis is expected to move up this year and to stabilize" around the Fed's 2.0 percent target over the medium term, the central bank said in a statement following a two-day policy meeting on Wednesday.

U.S. Treasury yields continued to climb after economic indicators seemed to confirm the Fed's inflation views.

Initial claims for U.S. unemployment benefits were below expectations, indicating a tight labour market, while U.S. Institute of Supply Management data showed prices paid by U.S. factories hitting a near 7-year high, and fourth-quarter labour costs increased by 2.0 percent, adding to inflation concerns.

The Dow Jones Industrial Average rose 37.32 points, or 0.14 percent, to 26,186.71, the S&P 500 lost 1.83 points, or 0.06 percent, to 2,821.98 and the Nasdaq Composite dropped 25.62 points, or 0.35 percent, to 7,385.86.

Banks, which benefit from higher interest rates, led the S&P 500 financials to a 1.0 percent gain, with Goldman Sachs helping to push the Dow into positive territory.

Of the 11 major sectors of the S&P 500, four posted gains.

Other notable stock movers included eBay, up 13.8 percent after its earnings report, and its announcement that it would move away from PayPal as its main payments partner. PayPal shares slid 8.1 percent.

UPS was down 6.1 percent after it reported fourth-quarter profit that was hurt by higher holiday season shipping costs. The company was the second-biggest percentage loser on the S&P 500.

Analysts see fourth-quarter S&P 500 company earnings growth of 14.9 percent, up from 12 percent expected on January 1. So far, of 227 companies that have reported, 79.7 percent have come in above Street estimates.

"Earnings are going very well, it demonstrates that the dramatic cut in corporate taxes are helping every one in terms of profitability," said Stephen Massocca, Managing Director at Wedbush Securities in San Francisco.

High-profile tech companies reported after the closing bell.

Amazon.com was up over 6.0 percent in after hours trading after results.

Alphabet was down nearly 3.0 percent in extended trade after its quarterly earnings.

Apple down about 1.0 percent in after hours trading after posting results.

Declining issues outnumbered advancing ones on the NYSE by a 1.24-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favoured advancers.

The S&P 500 posted 29 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 82 new highs and 66 new lows.

Volume on U.S. exchanges was 7.80 billion shares, above the 7.23 billion average for the full session over the last 20 trading days.

(Reporting by Stephen Culp; Editing by Nick Zieminski)