Thursday, April 18, 2024

Stock market today: Wall Street drifts in mixed trading as the bond market calms

by David Specht

NEW YORK (AP) — U.S. stocks are drifting in mixed trading Tuesday as the bond market calms down following some sharp swings.

The S&P 500 was virtually unchanged in midday trading, a day after slipping from its all-time high. The Dow Jones Industrial Average was up 66 points, or 0.2%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.2% lower.

Stocks have been under some pressure recently as hints keep arriving that the Federal Reserve likely won’t deliver cuts to interest rates as soon as traders had hoped. The economy has remained remarkably solid, even though the Fed has jacked up rates to slow it and inflation down. That has pushed some forecasts for the first easing of rates from March into the summer.

If easier interest rates in the short term won’t boost stock prices, the hope is that strong profits by companies will.

GE Healthcare Technologies was one of the best performers in the S&P 500 and up 11% after reporting healthier profit and revenue than expected.

Palantir Technologies, one of the companies that’s been riding a frenzy on Wall Street about artificial intelligence technology, jumped 24.1% after its results for the latest quarter roughly matched analysts’ expectations.

Streaming music and podcast platform Spotify leaped 8.4% after it reported stronger-than-expected growth in its subscriber base, even as revenue missed analyst targets.

They helped to offset a 9.7% tumble for FMC, whose products help protect crops. The company’s profit and revenue fell short of analysts’ projections, in part because of drought conditions in Brazil.

Fiserv was another laggard. The payments and financial technology company fell 3.7% after its revenue for the latest quarter fell just short of analysts’ expectations. Its profit nevertheless topped forecasts.

With earnings season at about the midway point, there are still plenty of heavyweights reporting this week including CVS Health, The Walt Disney Co. and PepsiCo.

In the bond market, the yield on the 10-year Treasury relaxed a bit and calmed following its slingshot ride higher in recent days. It eased to 4.11% from 4.17% late Monday.

Strong reports on the job market, services industries and other areas of the U.S. economy have pushed yields higher, up from 3.88% earlier this month.

While a delay in rate cuts hurts the stock market, particularly after very high expectations for them were a big reason for a big rally, the strong economic data also carry an upside for investors. They should mean stronger profits for companies.

Consider Wall Street’s reaction to Friday’s report that showed employers hired many more workers last month than expected. Investments tied to the S&P 500 initially fell after the release of the blowout data, but the index climbed through the day to close at a record.

That may indicate that the market “is warming up to the idea that ‘good news is, in fact, good,’ and perhaps less reliant on rate cuts,” according to UBS strategists led by Maxwell Grinacoff. But they acknowledge that stocks seen as lower quality are not seeing as big a benefit.

In stock markets abroad, Chinese indexes soared following the latest measures announced to prop up what have been some of the world’s worst-performing markets. Investors are hoping for even more action from the government.

Stocks leaped 4% in Hong Kong and 3.2% in Shanghai, though they’re both still down by more than 5% for the young year so far. Worries about a weak economic recovery and troubles in the real-estate industry have dragged on Chinese stocks.

Stocks were mixed and moved more modestly elsewhere in Asia and in Europe.

In London, the FTSE 100 rose 0.7% after shares of energy giant BP jumped following its latest earnings report.

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