Wall Street drifts to a mixed finish in a quiet day of trading
U.S. stocks held steady Tuesday, as trading on Wall Street calmed after some sharp recent swings.
The Standard & Poor’s 500 edged up by 6.96 points, or 0.1%, to 5,187.70. It was a quiet day after three straight leaps for the index of at least 0.9%.
The Dow Jones industrial average added 31.99, or 0.1%, to 38,884.26, and the Nasdaq composite slipped 16.69, or 0.1%, to 16,332.56.
Kenvue, the company whose brands include Band-Aids and Tylenol, rose 6.4% after topping analysts’ forecasts for profit and revenue in the latest quarter.
Walt Disney Co. sank 9.5% despite reporting stronger results for its latest quarter than analysts expected. Its revenue fell a bit shy of forecasts, and it expects its entertainment streaming business to soften in the current quarter.
They’re among the tail end of companies reporting their results for the first three months of the year. The majority of companies has been beating forecasts for earnings, but they’re not getting as big a boost to their stock prices afterward as they usually do, according to FactSet. Not only that, companies that fall short of profit expectations have seen their stock prices sink by more the following day than they have historically.
That could suggest investors are listening to critics who have been calling the U.S. stock market broadly too expensive after its run to records this year. For stock prices to climb, either profits will need to grow more or interest rates will need to fall.
Wall Street still considers the latter a possibility this year after some events last week that traders found encouraging.
Federal Reserve Chair Jerome H. Powell said the central bank remains closer to cutting its main interest rate than hiking it, despite a string of stubbornly high readings on inflation this year. A cooler-than-expected jobs report Friday, meanwhile, suggested the U.S. economy could pull off the balancing act of staying solid enough to avoid a bad recession without being so strong that it keeps inflation too high.
After charging higher through the start of this year, when hopes dimmed for cuts to interest rates by the Federal Reserve, Treasury yields have been regressing this month to offer some relief for the stock market.
The yield on the 10-year Treasury fell to 4.45% from 4.49% late Monday. The two-year yield, which moves more closely with expectations for the Fed, slipped to 4.82% from 4.83%.
Although long-term yields have been declining over the last week, strategists at Wells Fargo Investment Institute still expect them to remain relatively high for a while. That’s in part because expectations are broadly for inflation to remain higher than hoped. Luis Alvarado, global fixed income strategist, believes the 10-year yield will probably remain near its recent range.
Elsewhere on Wall Street, Crocs jumped 7.8% after reporting better profit and revenue than expected. It benefited from strong growth internationally.
International Flavors & Fragrances, which makes ingredients used in food and perfume, gained 6.4% after reporting better profit and revenue than expected. It also said it expects its revenue for the full year to come in at the higher end of its forecast range.
Lucid Group tumbled 14%.1 after the electric vehicle maker reported a worse loss for the latest quarter than analysts expected.
Builders FirstSource fell 19% despite topping forecasts for profit and revenue. The supplier of building products said a weakening multifamily market and higher mortgage rates were creating challenges, and its forecast for how much cash it will generate this year came in below some analysts’ expectations.
In stock markets abroad, indexes jumped across much of Europe and Asia. Stocks rose 2.2% in Seoul, 1.6% in Tokyo and 1.2% in London. Australia’s S&P/ASX 200 advanced 1.4% after the central bank decided to keep interest rates unchanged.
Choe writes for the Associated Press
