Tuesday, April 23, 2024

Stock market today: Strong profit reports support stocks a day after Wall Street’s sharp tumble

by Associated Press

NEW YORK (AP) — U.S. stocks are clawing back some of their sharp losses from the day before, as conditions calm a bit on Wall Street Wednesday.

The S&P 500 was 0.5% higher in early trading after tumbling 1.4% on Tuesday. A hotter-than-expected report on inflation forced investors to delay forecasts for when the Federal Reserve may begin cutting interest rates, potentially into the summer. Expectations for such cuts are a big reason stocks rallied to records recently.

The Dow Jones Industrial Average was up 81 points, or 0.2%, after dropping 524 points for its worst loss in nearly 11 months. The Nasdaq composite was 0.7% higher, as of 9:35 a.m. Eastern time.

The smallest stocks, which took the hardest hit from worries about higher interest rates on Tuesday, bounced back more than the rest of the market. The Russell 2000 index jumped 1.4%.

Helping to keep things steadier was a calmer bond market. Treasury yields were easing after shooting upward a day earlier on expectations the Fed would keep rates high for longer. The central bank has already jacked its main interest rate to the highest level since 2001 in hopes of slowing the overall economy just enough to grind high inflation down to its target.

The yield on the 10-year Treasury edged down to 4.29% from 4.32% late Tuesday. It’s still well above its 3.85% level at the start of this month.

DaVita jumped 9.2% for one of the S&P 500’s larger gains after the health care company reported stronger profit and revenue for the latest quarter than analysts expected.

Most companies in the S&P 500 have been topping analysts’ forecasts for the last three months of 2023. Hopes for stronger growth in 2024 from a solid economy have been another reason the S&P 500 has set 10 records already this year.

Lyft shares were 30.7% higher after a wild ride in off-hours trading driven by a typo in its latest earnings report. The ride-hailing company reported stronger profit and revenue than analysts expected, but its press release also said it expects a key measure of profitability to improve by 500 basis points, or 5 percentage points. Later, it said that should have been 50 basis points, or 0.5 percentage points.

Lyft’s stock had rocketed up 60% in after-hours trading Tuesday following the typo.

Rival Uber Technologies rose 8.9% after its board authorized a program to buy back up to $7 billion of its stock. Investors tend to like such programs because they send cash directly to shareholders and can boost per-share profits.

Robinhood Markets jumped 14% after it reported a profit for the latest quarter, when analysts were expecting a loss. The stock and crypto trading platform also said its total net revenue rose 24%, more than analysts expected.

Online vacation rental booker Airbnb slid 4.7% after it reported losing $349 million in the fourth quarter due to an income tax settlement with Italy. Analysts had been expecting a profit.

The company forecast first-quarter revenue that would meet or beat Wall Street expectations, however, Airbnb said the pace of bookings growth is likely to “moderate” from the fourth quarter into the first.

Akamai Technologies dropped 4.2% after it reported mixed results. Its profit for the latest quarter topped analysts’ forecasts, but its revenue fell short.

In stock markets abroad, London’s FTSE 100 rose 0.7% following a better-than-expected report on inflation in the United Kingdom.

Hong Kong’s Hang Seng index gained 0.8% after trading reopened there, but markets remained closed in mainland China for the Lunar New Year holiday. Stocks fell elsewhere in Asia, with Japan’s Nikkei 225 down 0.7% and South Korea’s Kospi down 1.1%.

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