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Wall Street Adds to Hot Start to Week 04/23 09:49
U.S. stocks are ticking higher Tuesday and adding to their hot start to the
week.
NEW YORK (AP) -- U.S. stocks are ticking higher Tuesday and adding to their
hot start to the week.
The S&P 500 was up 0.7% in morning trading to pull further out of the hole
created by a six-day losing streak. The Dow Jones Industrial Average was up 170
points, or 0.4%, as of 10 a.m. Eastern time, and the Nasdaq composite was 1%
higher.
A report on U.S. business activity that was weaker than expected was helping
to support the market. Financial markets are in an awkward phase where the hope
is for the economy to stay solid enough to avoid a recession, but not so hot
that it keeps upward pressure on inflation.
The preliminary report from S&P Global released Tuesday morning seemed to
hit that sweet spot. Treasury yields eased in the bond market, and stocks added
to gains immediately after its release.
A flood of earnings reports was also dictating much of trading. Danaher was
one of the strongest forces lifting the S&P 500 after it reported stronger
profit for the first quarter than analysts expected. It rose 6.7% after citing
strength in its bioprocessing and molecular diagnostics businesses.
Kimberly-Clark gained 5.4% after the maker of Huggies, Kleenex and Kotex
reported better-than-expected profit for the first quarter and raised its
earnings forecast for the full year. General Motors revved up by 4.7% after
topping forecasts thanks to sales of pickup trucks and other higher-profit
vehicles. GE Aerospace climbed 4.2% after reporting stronger profit for the
latest quarter than analysts expected.
They helped overshadow a 5.4% drop for Nucor after the steelmaker fell short
of forecasts for both profit and revenue.
MSCI, whose investment indexes guide much of the industry, fell 11.2% after
reporting weaker revenue growth than expected.
Sherwin Williams sank 4.4% after it likewise missed expectations, in part
because of weaker paint sales for new homes amid the industry's challenges with
high mortgage rates.
JetBlue Airways lost 12.9% despite topping expectations for the latest
quarter. Its forecasts for upcoming revenue came up short of what some analysts
expected. Other airlines also weakened, including a 2.1% fall for American
Airlines.
The market's main event may be arriving after trading ends for the day.
That's when Tesla will become the first of the "Magnificent Seven" stocks that
accounted for most of last year's gains for the S&P 500 to report its
first-quarter results. Expectations are high after the small handful of stocks
rocketed to big gains in 2023, and they'll need to at least match them to
justify their prices.
With skeptics still calling the broad stock market too expensive, criticism
would ease only if either companies produce higher profits or if interest rates
fall. The latter looks less likely.
Top officials at the Federal Reserve warned last week they may need to keep
interest rates high for a while in order to ensure inflation is heading down to
their 2% target. That was a big letdown for financial markets, dousing hopes
that had built after the Fed signaled earlier that three interest-rate cuts may
come this year.
Lower rates had appeared to be on the horizon after inflation cooled sharply
last year. But a string of reports this year showing inflation has remained
hotter than expected has raised worries about stalled progress.
That's why Tuesday's report suggesting a slowdown in growth for overall
business activity across the country, with orders falling for both the
manufacturing and services sectors, was so welcomed.
The yield on the 10-year Treasury fell to 4.58%. It had been at 4.64% just
before the report's release and at 4.61% late Monday.
The two-year Treasury yield, which moves more on expectations for Fed
action, had a similar drop. It fell to 4.92% from 4.97% late Monday.
In stock markets abroad, indexes were rising across much of Europe. They
were mixed earlier in Asia. Stocks jumped 1.9% in Hong Kong but fell 0.7% in
Shanghai.
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