Stock market today: Wall Street holds near its record heights
By STAN CHOE
AP Business Writer
NEW YORK (AP) — U.S. stocks drifted through a quiet Tuesday and held near their record heights following a mixed set of profit reports.
The S&P 500 slipped 2.96 points, or 0.1%, from its record to 4,924.97. The Dow Jones Industrial Average gained 133.86, or 0.3%, to 38,467.31, and the Nasdaq composite fell 118.15, or 0.8%, to 15,509.90.
UPS slumped 8.2% 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 6.6% 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 7.8% after reporting stronger profit and revenue than expected.
Treasury yields were also mixed in the bond market following reports that showed the economy remains stronger than expected. One said confidence among consumers is climbing, while another suggested the job market may be warmer than forecast.
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 expecting the data to show a cooldown in the number of openings.
A drawdown would have fit more neatly into the trend that’s carried 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.
Hopes for a continued such trend are what have Wall Street foaming about the possibility of several cuts to interest rates by the Federal Reserve this year. Cuts would mark a sharp turnaround from the Fed’s 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 began its latest policy meeting on interest rates Tuesday, but virtually no one expects it to cut rates this soon. That won’t stop economists and traders from parsing every word 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.
“We think markets are overly optimistic that we’ll see a Fed interest rate cut in March,” said Joe Davis, chief economist at Vanguard. “It likely will be midyear before policymakers are confident that they have reined in inflation sufficiently to start cutting their target for short-term interest rates.”
The two-year Treasury yield, which moves closely with expectations for the Fed’s action, rose to 4.36% from 4.32% late Monday. It moved decisively higher following the release of the economic reports.
The yield on the 10-year Treasury, which is the centerpiece of the bond market, fell to 4.04% from 4.09% late Monday.
After trading ended on Wall Street Tuesday, a pair of the market’s most influential stocks also reported their latest quarterly results.
As two of the largest stocks in the market by value, Microsoft and Alphabet have outsized sway on the S&P 500 and other indexes. They, along with five other Big Tech stocks, have accounted for the majority of the S&P 500’s torrid rally since hitting a bottom two Octobers ago.
Three more of the “Magnificent Seven” Big Tech stocks will report their results on Thursday: Apple, Amazon and Meta Platforms. They’ll also need to hit expectations to justify their massive leaps.
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 4.7% 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 modestly higher in Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
