On Tuesday, U.S. stocks exhibited a lack of clear direction near their record highs, responding to a mixed set of earnings reports.
The S&P 500 experienced a marginal 0.1% decline during morning trading. As of 10:15 a.m. Eastern time, the Dow Jones Industrial Average was down by 33 points, or 0.1%, while the Nasdaq composite saw a 0.2% dip.
UPS faced an 8.1% decline, despite reporting stronger-than-expected profits for the latest quarter. The company’s revenue fell short of Wall Street estimates, and its full-year revenue forecast for 2024 was weaker than anticipated.
Whirlpool also saw a downturn, dropping 6%, despite reporting better-than-expected profits. However, its 2024 revenue forecast of $16.9 billion was approximately $1 billion below analysts’ estimates.
Offsetting these losses was General Motors, which surged 7.3% after reporting profits and revenue that exceeded expectations.
In the bond market, Treasury yields remained relatively steady, recovering earlier losses following a report suggesting a more robust job market than economists had predicted. The report revealed that U.S. employers advertised 9 million job openings at the end of December, slightly surpassing expectations and exceeding November’s levels.
Traders were cautiously optimistic that this data might indicate a slowdown in job openings, aligning with the current trend on Wall Street, where moderate economic growth is seen as essential to maintaining inflation control without triggering a recession.
The Federal Reserve is commencing its latest policy meeting on interest rates. Although a rate cut is not anticipated at this stage, analysts and traders will scrutinize every communication from the Fed for clues about potential rate cuts in March.
The 10-year Treasury yield slipped to 4.08% from 4.09%, with investors closely monitoring economic indicators like job openings and consumer confidence.
After market close, two influential stocks, Microsoft and Alphabet, will report their quarterly results. Both companies, among the largest in the market by value, have significant impacts on the S&P 500 and other indexes.
Expectations are high for Microsoft and Alphabet, as their performance will need to justify substantial gains in the past year. These two, along with other major tech stocks, have been key contributors to the S&P 500’s strong rally.
Despite some companies reporting better-than-expected profits, analysts note that these positive results have not resulted in the usual market enthusiasm. JetBlue Airways, for instance, saw a 2.3% decline despite reporting a milder loss for the last quarter of 2023 than analysts had predicted.
Internationally, Chinese indexes faced additional losses, particularly in Hong Kong, where the Hang Seng index sank by 2.3%. Chinese regulators are taking measures to stabilize markets amid concerns about the troubled property industry and slower-than-expected growth in the world’s second-largest economy. Stock markets in other parts of Asia were mixed, while European markets experienced modest gains.
Featured Image: Freepik @ wirestock
