U.S. stocks are drifting around their record heights Tuesday following a mixed set of profit reports. The S&P 500 was 0.1% lower in morning trading. The Dow Jones Industrial Average was down 33 points, and the Nasdaq composite was 0.2% lower.
Quick Read
- U.S. stocks are trading near record highs with the S&P 500 down 0.1%, the Dow Jones Industrial Average down 0.1%, and the Nasdaq composite down 0.2%.
- UPS saw an 8.1% drop in its stock price despite reporting stronger profits than expected. However, its revenue fell short of Wall Street estimates, and its 2024 revenue forecast was weaker than expected.
- Whirlpool’s stock fell by 6% despite reporting better-than-expected profits. Its 2024 revenue forecast of $16.9 billion was approximately $1 billion below analysts’ estimates.
- General Motors’ stock surged 7.3% after reporting stronger profits and revenue than expected.
- Treasury yields were relatively steady, erasing earlier losses after data indicated a warmer job market than economists anticipated. U.S. employers advertised 9 million job openings at the end of December.
- Investors are hoping for a cooldown in job openings, aligning with the trend of slowing economic growth without causing a recession.
- The Federal Reserve is starting its latest policy meeting on interest rates, with expectations that it won’t cut rates this soon. However, economists and traders will scrutinize Fed communication for clues about a potential rate cut in March.
- The yield on the 10-year Treasury slipped to 4.08% from 4.09% late Monday.
- Microsoft and Alphabet, two influential Big Tech stocks, will report their quarterly results, with high expectations due to their significant market value.
- JetBlue Airways reported a milder loss for Q4 2023 than expected but saw its stock drop 2.3%. It anticipates flat revenue in 2024 and rising cost pressures.
- Chinese stock indexes continued to decline, with concerns about the property industry and slower economic growth in China.
- Chinese regulators are taking measures to stabilize markets amid these concerns.
- Stock markets in Asia were mixed, while European markets saw modest gains.
The Associated Press has the story:
Wall Street drifts near its record heights following profit reports
Newslooks- NEW YORK (AP) —
U.S. stocks are drifting around their record heights Tuesday following a mixed set of profit reports. The S&P 500 was 0.1% lower in morning trading. The Dow Jones Industrial Average was down 33 points, or 0.1%, and the Nasdaq composite was 0.2% lower.
UPS slumped 8.1% even though it reported stronger profit for the latest quarter than analysts expected. Its revenue fell short of Wall Street’s estimates, and it also gave a forecast for full-year revenue in 2024 that was weaker than expected.
Whirlpool sank 6% despite likewise reporting a better profit than expected. Its forecast for 2024 revenue of $16.9 billion was roughly $1 billion below analysts’ estimates.
Helping to offset those losses was General Motors. The automaker jumped 7.3% after reporting stronger profit and revenue than expected.
Treasury yields were holding relatively steady in the bond market and erased earlier losses after a report suggested the job market may be warmer than economists expected. U.S. employers advertised 9 million job openings at the end of December, which was a touch more than economists expected and slightly above November’s level.
Traders were hoping the data would show a cooldown in the number of openings. That would have fit more neatly into the trend that’s sent Wall Street to a record: a slowdown in the economy’s growth strong enough to keep a lid on inflation but not so much that it will create a recession.
Such hopes are what ignited excitement about the potential for the Federal Reserve to cut interest rates several times this year. Cuts would mark a sharp turnaround from its dramatic hikes to rates over the last two years, and the reductions would give a boost to the economy and investment prices.
The Federal Reserve is beginning its latest policy meeting on interest rates, but virtually no one expects it to cut rates this soon. That nevertheless won’t stop economists and traders from parsing every bit of communication coming out of the Fed Wednesday after its meeting finishes. They’ll be searching for clues that a rate cut may arrive at its next meeting in March.
The yield on the 10-year Treasury slipped to 4.08% from 4.09% late Monday. It was at 4.04% just before the data on job openings and a separate report showing consumer confidence is rising more than expected.
After trading ends for the day, a pair of Wall Street’s most influential stocks will also report their latest quarterly results.
Microsoft and Alphabet are two of the largest stocks in the market by value, which gives their movements outsized sway on the S&P 500 and other indexes. They, along with five other Big Tech stocks, have also accounted for the majority of the S&P 500’s torrid rally since hitting a bottom two Octobers ago.
Expectations have built high for them, and they’ll need to deliver to justify their huge gains. Microsoft has jumped roughly 69% over the last 12 months, while Alphabet has gained nearly 58%.
Three more of the “Magnificent Seven” Big Tech stocks will report their results on Thursday: Apple, Amazon and Meta Platforms.
Companies that have reported better profits than expected so far this reporting have not been getting as big a pop as usual, analysts say.
JetBlue Airways sank 2.3% despite reporting a milder loss for the last three months of 2023 than analysts expected. It said it expects revenue to be roughly flat in 2024, while its cost pressures outside of fuel will likely rise.
In stock markets abroad, Chinese indexes slumped to tack more losses onto their already tough start to the year.
Shares in property developer China Evergrande Group, the world’s most heavily indebted real estate company, remained suspended from trading after a Hong Kong court ordered the liquidation of the company.
Other property companies led the decline in Hong Kong, where the Hang Seng index sank 2.3%. Stocks in Shanghai gave up 1.8%.
Chinese regulators have been moving to prop up the markets amid worries about the troubled property industry and disappointing growth in the world’s second-largest economy.
Stocks were mixed elsewhere in Asia and rising modestly in Europe.
