NYSE Dow Jones finished today at:

[divs4ever]

Hmm Mr Divs The reflection in the mirror dosn't seem to be anything like me!!!!!

lucky you

but i am probably still better looking than the economy that is coming

that to me looks butt-ugly ( even worse than Rodney Dangerfield with a hangover )

 

[farmerge]

Hmm Mr Divs The reflection in the mirror dosn't seem to be anything like me!!!!!

Gota be off the eyeballs are starting to fall out of the sockets.

 

[divs4ever]

sleep tight

cheers

 

[bigdog]

Asian shares moderately higher with focus on inflation data

Asian shares were mostly higher Wednesday, as markets watched for key inflation data likely to influence the Federal Reserve’s stance on interest rates. Benchmarks rose in Tokyo, Sydney and Shanghai but fell in Hong Kong and Seoul. Wall Street drifted through a muted day of trading, with stocks...

apnews.com

Wall Street drifts through muted day ahead of inflation data​

By STAN CHOE

NEW YORK (AP) — Wall Street drifted through a muted day of trading Tuesday, with stocks and bonds making modest moves ahead of reports later in the week with the potential to move markets.

The S&P 500 had its smallest one-day move in more than a year, slipping 0.17 points, or less than 0.1%, to 4,108.94. Most of the stocks in the index rose, as did the Dow Jones Industrial Average, which gained 98.27, or 0.3%, to 33,684.79. The Nasdaq composite slipped 52.48, or 0.4%, to 12,031.88.

The biggest immediate question for Wall Street has been whether the Federal Reserve will keep hiking interest rates in its attempt to get high inflation under control. It’s already raised rates at a furious pace over the last year, enough to slow some areas of the economy and for strains to appear in the banking system.

That’s why markets are gearing up for Wednesday’s report on inflation. Economists expect it to show inflation slowed to 5.2% in March from 6% in February. That would mean continued progress since inflation peaked last summer, but it would also still be well above the Fed’s target.

A reading that’s higher than expected would likely bolster traders’ expectations that the Fed will raise rates by another quarter of a percentage point at its next meeting in May. Higher rates can undercut inflation, but they also raise the risk of a recession later on and hurt prices for stocks and other investments.

Traders in the bond market have been showing nervousness about the Fed possibly going too far on rates and then having to cut them as soon as this summer in order to prop up the economy. But the stock market has remained more resilient, helped by hopes the Fed could thread the needle and raise rates just enough to stifle inflation without causing a severe recession.

“While navigating the fickle market narrative isn’t easy, it helps that rates are pricing in a more pessimistic view compared to equities, which are leaning toward a more optimistic outlook,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. That’s one of the reasons he prefers high-quality bonds over stocks.

Still-high inflation is one of the reasons analysts expect this upcoming earnings reporting season to show the worst drop since the depths of the pandemic in 2020. A bunch of banks will help kick off the earnings reporting season when they tell investors on Friday how much they earned during the first three months of the year.

Besides the backwards-looking numbers, investors say they’re also hungry to hear what CEOs say about current and upcoming conditions. One fear is that banks in particular could pull back on their lending following all the turmoil in their sector, caused in part by the past year’s swift leap in interest rates.

If they do cut off lending to businesses, that could further slow the economy and raise the risk of a recession.

CarMax jumped 9.6% after reporting stronger profit than analysts expected for its latest fiscal quarter, which ended Feb. 28. It had the biggest gain within the S&P 500, and stocks in industries whose profits are most closely tied to the economy’s strength generally rose.

On the losing end was Moderna, which fell 3.1% after it said its potential flu vaccine needs more study in a late-stage clinical trial.

Big Tech stocks were also weak. They and other high-growth stocks are seen as the most hurt by rising interest rates, and a 2.3% drop for Microsoft was the heaviest drag on the S&P 500.

In markets abroad, stocks rose modestly across much of Europe.

In Asia, stocks jumped 1.4% in Seoul after the Bank of Korea left its policy interest rate unchanged for a second straight meeting. It’s one of many regional central that are now slowing or reversing rate increases due to signs of weakness in the economy.

In the bond market, yields were holding relatively steady. The 10-year Treasury yield was holding firm at 3.42%. It helps set rates for mortgages and other important loans.

The two-year yield, which more closely tracks expectations for the Fed, ticked up to to 4.02% from 4.01% late Monday.

ASX 200 expected to rise again​

The Australian share market looks set to rise on Wednesday following a relatively positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 25 points or 0.3% higher this morning.

Wall Street drifted through a muted day of trading Tuesday, with stocks and bonds making modest moves ahead of reports later in the week with the potential to move markets.

The S&P 500 had its smallest one-day move in more than a year, slipping 0.17 points, or less than 0.1%, to 4,108.94. Most of the stocks in the index rose, as did the Dow Jones Industrial Average, which gained 98.27, or 0.3%, to 33,684.79. The Nasdaq composite slipped 52.48, or 0.4%, to 12,031.88.

MARKET WATCH (The Age Business Briefing 7.41am)

 

[farmerge]

sleep tight

cheers

I certainly did off to cart a truck load of wool to Freo

 

[divs4ever]

I certainly did off to cart a truck load of wool to Freo

good luck ( don't let them pull the wool over your eyes )

 

[bigdog]

Asia stocks mixed after Wall St dips on US recession warning

Asian stock markets are mixed after the Federal Reserve said its economists expect a “mild recession” this year. Shanghai and Hong Kong declined while Tokyo and Seoul advanced. Oil prices edged lower. Wall Street closed lower after the United States government reported inflation still is higher...

apnews.com

Stocks dip after inflation data, Fed economists’ warning​

By STAN CHOE

NEW YORK (AP) — Stocks dipped to close an up-and-down Wednesday on Wall Street following the latest update on inflation and the latest warning of a possible recession.

The S&P 500 fell 16.99, or 0.4%, to 4,091.95 after drifting between small gains and losses through the day. The Dow Jones Industrial Average slipped 38.29, or 0.1%, to 33,646.50, and the Nasdaq composite lost 102.54, or 0.9%, to 11,929.34.

The main focus for more than a year on Wall Street has been high inflation and how much painful medicine the Federal Reserve will have to dole out to contain it. Wednesday’s update on inflation was a mixed one, showing prices at the consumer level were 5% higher last month than a year earlier.

That’s still well above the Federal Reserve’s comfort level, and some underlying trends within the data were also concerning. That weighed on financial markets. But on the upside for investors, the overall inflation number was still better than the 5.2% that economists expected. It also marked a continued slowdown from inflation’s peak last summer.

Altogether, the data sent stocks bouncing, though the swings weren’t nearly as severe as they’ve been over the past year. Roughly 65% of the stocks within the S&P 500 fell.

Traders are still largely betting the Fed will raise short-term interest rates by another quarter of a percentage point at its next meeting, according to data from CME Group. They shaded some bets toward the possibility that the Fed will merely hold rates steady in May, something it has not done for more than a year.

“The Fed has every reason to take a pause and only a handful of reasons not to,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

High rates can undercut inflation, but only by bluntly slowing the entire economy. That raises the risk of a recession later on, while hurting prices for stocks, bonds and other investments in the meantime. The Fed has already raised rates at a furious pace over the last year, enough that it’s hurt pockets of the economy and created strains within the banking system.

That has many investors and economists expecting at least a shallow, short recession to hit the economy later this year. If banks pull back on lending as a result of all the troubles in their industry, it could tighten the vise even further on the economy.

In minutes from the Fed’s last meeting, which were released Wednesday afternoon, the central bank said its staff economists forecast a pullback in lending will cause a “mild recession” starting later this year. Earlier, its staff had been forecasting subdued growth.

The bond market has been showing more nervousness about a potential recession, and traders have built bets that the Fed will have to cut interest rates later this year in order to prop up the economy.

Yields fell Wednesday immediately after the inflation report, pared their losses later in the day and then dipped again following the release of the Fed’s minutes. The 10-year Treasury yield slipped to 3.41% from 3.43% late Tuesday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, fell to 3.96% from 4.03%.

The stock market, meanwhile, has been showing comparatively less fear. It’s still up for the year so far, in part on hopes the Fed can pull off the balancing act of slowing the economy just enough to suffocate inflation but not so much as to cause a severe recession that undercuts corporate profits.

Companies later this week will begin telling investors how much profit they made during the first three months of the year. Expectations are low, with analysts forecasting the worst drop in S&P 500 earnings per share since the pandemic was crushing the economy in 2020. But many analysts also expect this to mark the bottom, with forecasts calling for a return to growth later this year.

American Airlines Group lost 9.2% after it gave a forecast for its first-quarter profit that fell short of some analysts’ expectations. It said it expected to report stronger results than it had earlier forecast, but it wasn’t high enough to meet many analysts’ estimates for earnings per share.

It had one of the largest losses within the S&P 500 and helped drag down other airline stocks. United Airlines Holdings slid 6.5%, and Delta Air Lines shed 2.4%.

Also weighing on Wall Street Wednesday was the fact that inflation remains high, even if it is slowing. And underneath the surface, inflation also remains sticky after ignoring food and energy costs. That’s something called “core inflation” and can offer a better picture of where trends are heading.

That has some investors girding for the “higher for longer” interest rates that the Fed has long been warning about.

“The Fed’s mandate of 2% inflation is a distant dream and interest rates have to remain somewhat restrictive till we see meaningful improvement in the trajectory of core inflation,” said Gargi Chaudhuri, head of iShares Investment Strategy, Americas.

ASX 200 expected to edge lower​

The Australian share market is expected to have a subdued session on Thursday after a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning.

Stocks dipped to close an up-and-down Wednesday on Wall Street following the latest update on inflation and the latest warning of a possible recession.

The S&P 500 fell 16.99, or 0.4%, to 4,091.95 after drifting between small gains and losses through the day. The Dow Jones Industrial Average slipped 38.29, or 0.1%, to 33,646.50, and the Nasdaq composite lost 102.54, or 0.9%, to 11,929.34.

MARKET WATCH

 

[bigdog]

Asian stocks follow Wall St higher as US inflation cools

Asian stock markets have followed Wall Street higher after U.S. inflation eased in March and China reported unexpectedly strong exports. Shanghai, Tokyo and Hong Kong gained. Oil prices rose. Wall Street’s benchmark S&P 500 index advanced 1.3% after inflation at the wholesale level slowed more...

apnews.com

Wall Street rallies and tech stocks leap as inflation cools​

By STAN CHOE

NEW YORK (AP) — A rally on Wall Street Thursday lifted stocks to their highest level in almost two months following the latest sign that inflation continues to cool.

The S&P 500 rose 1.3% after a report showed inflation at the wholesale level slowed last month by more than expected. The Dow Jones Industrial Average gained more than 383 points, or 1.1%, while the Nasdaq composite jumped 2%.

Thursday’s report showed that prices paid to producers last month were 2.7% higher than a year earlier, the lowest inflation level there in more than two years. The hope on Wall Street is that easier inflation on the wholesale level will not only support profits for companies but also flow through to cooler inflation for consumers. A day earlier, a separate report said inflation for consumers slowed to 5%.

Inflation and how high the Federal Reserve will hike interest rates to tame it have been at the center of Wall Street’s struggles for more than a year. The Fed has hiked rates at such a feverish pace that it’s already slowed parts of the economy and caused strains to appear in the banking system.

A separate report Thursday said slightly more workers applied for unemployment benefits last week than expected, though the job market has remained resilient. A softening job market could take more pressure off inflation. That plus the inflation report underscored traders’ expectations that the end is near for the Fed’s rate hikes.

Traders shaded some bets toward the Fed holding rates steady at it next meeting in May, though the majority still call for one more modest hike.

A less aggressive Fed would help Big Tech stocks in particular because high-growth stocks are seen as some of the most vulnerable to higher rates. Apple climbed 3.4%, and Amazon jumped 4.7%, and the pair were two of the biggest forces lifting the S&P 500.

The Fed has hiked rates at every one of its meetings since early last year, often by double or triple the usual amount. High rates can smother inflation but only by slowing the entire economy, raising the risk of a recession and hurting prices for investments.

High interest rates and still-high inflation are eating away at corporate profits, and the biggest U.S. companies are starting to tell investors how much they earned during the first three months of the year. Expectations are low, with forecasts calling for the sharpest drop in earnings since the pandemic was pummeling the economy in 2020.

Delta Air Lines slid 1.1% after flipping between gains and losses through the morning. It reported weaker results for the latest quarter than expected, but it also said customers still want to fly despite all the economy’s challenges. It predicted a bigger-than-expected profit for the second quarter.

Investors are likely to focus more on such forecasts than on the backwards-looking results of the last three months. Even though forecasts for 2023 earnings have come down a bit, “2023 consensus still looks optimistic if we are headed to a recession,” equity strategist Savita Subramanian wrote in a BofA Global Research report.

Several of the biggest banks will report their results Friday, offering potentially more clues. One of the fears on Wall Street is that recent turmoil in the banking system could cause a pullback in lending, which in turn could weaken the economy. The Fed’s staff economists see such weakness potentially causing a mild recession later this year, the central bank said Wednesday.

The bond market has shown much more worry about a possible recession than the stock market, with traders betting the Fed will have to cut interest rates later this year in order to prop up the economy.

Treasury yields fell immediately after Thursday’s weaker-than-expected reports, before paring their losses and reversing through the morning. The yield on the 10-year Treasury rose to 3.44% from 3.40% late Wednesday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, was holding steady at 3.97%.

The S&P 500 gained 54.27 points to 4,146.22. The Dow rose 383.19 to 34,029.69, and the Nasdaq jumped 236.93 to 12,166.27.

Strategists at Goldman Sachs are more optimistic about the economy’s prospects than many, forecasting only a 35% probability of a recession. But they also say prices in markets available now may mean not much upside is left.

The bond market may be looking for cuts to rates, but the Fed may have less room to lower them given how strong the job market is. Profit margins may also have little room to rise further, which would hamper stocks.

That leaves the possibility for further returns from stocks and bonds to be “not as stellar as one might expect,” Jan Hatzius, Goldman Sachs’ chief economist and head of global investment research, said in a report.

ASX 200 expected to rebound​

The Australian share market looks set to end the week on a positive note after Wall Street had its best session since February. According to the latest SPI futures, the ASX 200 is expected to open 15 points or 0.25% higher this morning.

A rally on Wall Street Thursday lifted stocks to their highest level in almost two months following the latest sign that inflation continues to cool.

The S&P 500 rose 1.3% after a report showed inflation at the wholesale level slowed last month by more than expected. The Dow Jones Industrial Average gained more than 383 points, or 1.1%, while the Nasdaq composite jumped 2%

The S&P 500 gained 54.27 points to 4,146.22. The Dow rose 383.19 to 34,029.69, and the Nasdaq jumped 236.93 to 12,166.27.

MARKET WATCH

 

[bigdog]

Stocks slip as rate worries overshadow big bank profits

Stocks on Wall Street dipped as worries about interest rates offset an encouraging start to earnings reporting season for big U.S. companies. The S&P 500 lost 0.2% Friday but still squeezed out a fourth weekly gain in the last five. A top Fed official warned more interest rate hikes may be...

apnews.com

Stocks slip as rate worries overshadow big bank profits​

By STAN CHOE

NEW YORK (AP) — Stocks on Wall Street dipped Friday as worries about interest rates overshadowed an encouraging start to earnings reporting season for big U.S. companies.

The S&P 500 fell 8.58 points, or 0.2%, to 4,137.64 after giving up an early gain. The Dow Jones Industrial Average lost 143.22, or 0.4%, to 33,886.47, while the Nasdaq composite sank 42.81, or 0.4%, to 12,123.47.

The S&P 500 still squeezed out a fourth winning week in the last five, built in part on hopes the Federal Reserve may soon end its barrage of rate hikes as inflation cools. High interest rates can stifle inflation but only by slowing the economy, raising the risk of a recession and dragging on prices for investments.

A top Fed official dampened those hopes Friday after saying inflation remains far too high and more tightening may be needed. Christopher Waller, a member of the Fed’s governing board, also said that even after hikes to rates end, they will likely need to stay high for longer than markets expect.

After his comments, traders built bets that the Fed will raise rates at its next meeting in May, instead of taking its first pause in more than a year. Some also began betting the Fed may hike rates again in June, according to data from CME Group.

High-growth stocks tend to be among the most hurt by high rates, and Big Tech stocks were among the heaviest weights on the S&P 500. Microsoft fell 1.3%.

Swaths of the economy have already begun slowing under the weight of higher interest rates, raising worries that a recession may be likely. A report on Friday showed U.S. shoppers cut their spending at retailers by more last month than expected. Much of that was due to falling gasoline prices, and the drop for what economists call “core retail sales” wasn’t as bad as forecast.

“The Fed’s challenge has been to cool inflation without putting the economy into a deep freeze in the process,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office. “The dynamic is still playing out in the markets, and we could see more choppy price action as a result.”

Potentially making things more difficult for the Fed was another report Friday that said U.S. households are girding for higher inflation. Consumers are expecting inflation over the next year of 4.6%, up from expectations for 3.6% a month earlier, according to a preliminary survey by the University of Michigan.

That could be troublesome, as the Fed has long feared entrenched expectations of high inflation could lead to a vicious cycle that keeps it high. Longer-term expectations for inflation, though, remain stable and clocked in at 2.9% for a fifth straight month, according to the survey.

All the worries helped push Treasury yields higher. The 10-year Treasury yield rose to 3.51% from 3.45% late Thursday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield moves more on expectations for the Fed, and its gain was sharper, up to 4.10% from 3.97%.

Helping to offset some of the worries about rates were big gains by several of the nation’s biggest banks. They reported profits for the first three months of the year that blew past expectations.

They helped kick off the reporting season for big U.S. companies, where expectations are mostly dismal. Despite such worries, JPMorgan Chase jumped 7.6% after its profit surged by more than half from a year earlier.

It benefited from the strains unearthed in the banking system last month that shook global markets. Those worries pushed some customers to pull cash from smaller banks and move it to bigger ones.

Citigroup rose 4.8% after it also reported stronger profit than expected. BlackRock, the world’s largest asset manager, rose 3.1% after its earnings likewise topped forecasts.

Boeing was one of the heaviest weights on the S&P 500. Its stock slid 5.6% after the aircraft maker said Thursday that production and delivery of a “significant number” of its 737 Max planes could be delayed because of questions about a supplier’s work on the fuselages.

Boeing said the supplier, Spirit AeroSystems, used a “non-standard manufacturing process” during installation of fittings near the rear of some 737s. Boeing said the situation is not an immediate safety issue and planes already flying “can continue operating safely.”

 

[farmerge]

good luck ( don't let them pull the wool over your eyes )

Unfortunately that job has got transferred to this Friday.

 

[bigdog]

ASX 200 expected to rise

The Australian share market looks set to rise on Monday despite a poor finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% higher this morning.

Stocks on Wall Street dipped Friday as worries about interest rates overshadowed an encouraging start to earnings reporting season for big U.S. companies.


The S&P 500 fell 8.58 points, or 0.2%, to 4,137.64 after giving up an early gain. The Dow Jones Industrial Average lost 143.22, or 0.4%, to 33,886.47, while the Nasdaq composite sank 42.81, or 0.4%, to 12,123.47.

MARKET WATCH

 

[bigdog]

Stock market today: Asia mixed despite China growth data

Asian shares are trading mixed Tuesday as pessimism about global uncertainties remained even as China reported a better-than-expected economic growth data. Japan's benchmark Nikkei 225 rose in morning trading, but shares fell in Sydney, Seoul and Hong Kong, while being little changed in...

apnews.com

Stocks drift higher as earnings season kicks into gear​

By STAN CHOE

NEW YORK (AP) — Wall Street drifted higher Monday to kick off the first full week of earnings reporting season.

The S&P 500 rose 13.68, or 0.3%, to 4,151.32 in its first trading after squeezing out its fourth winning week in the last five. The Dow Jones Industrial Average gained 100.71, or 0.3%, to 33,987.18, while the Nasdaq composite climbed 34.26, or 0.3%, to 12,157.72.

All three swayed between small gains and losses in quiet trading before ending near their highs for the day.

Several financial companies reported a mixed set of profit reports for the first three months of the year. They followed up on a bevy of better-than-expected reports f rom JPMorgan Chase and other big U.S. banks that marked the unofficial start of reporting season late last week.

A lot of focus has been on the strength of the financial industry broadly after the second- and third-largest U.S. bank failures in history last month rocked markets worldwide.

Charles Schwab reported better profit than expected, and its stock rose 3.9%. It flipped from an earlier loss after it said deposits fell more last quarter than expected. It also paused a stock buyback program.

A worry for the broad financial industry has been that customers could pull out deposits amid all the fear about the U.S. banking system. The spotlight has been hottest on regional banks that are a rung or several below in size of JPMorgan Chase and the other massive, “too-big-to-fail” banks. They’re seen as more vulnerable to customers fleeing en masse, akin to the runs that helped cause the failures of Silicon Valley Bank and Signature Bank last month.

M&T Bank jumped 7.8% for the biggest gain in the S&P 500 after it reported stronger profit and revenue than expected.

State Street dropped 9.2% after reporting slightly weaker profit and revenue than forecast.

Broadly, e xpectations for companies across the S&P 500 this reporting season are very low. Analysts are forecasting the sharpest drop in earnings per share for companies in the S&P 500 since the pandemic was pounding the global economy in 2020.

Later this week, Bank of America, Johnson & Johnson, Tesla and several regional banks will also report their results.

So far, the earliest trends for earnings season seem to be encouraging, and the highest percentage of companies are beating profit forecasts for the first week since at least 2012.

“A massive, systemic financial confidence shock appears to have been averted, but tighter credit is manifesting in the real economy,” strategists led by Savita Subramanian wrote in a BofA Global Research report.

The worry is that all the turmoil in the U.S. banking system could cause some banks to pull back on their lending to companies and households. That would effectively tighten the brakes on the economy, when the Federal Reserve has already clamped the vise sharply over the last year in hopes of slowing high inflation.

The Fed has jacked up interest rates at the fastest pace in decades, and expectations are firming that it will raise them again at its next meeting next month. Even though inflation has been cooling, it still remains far above the Fed’s liking.

Higher rates can stifle inflation but only by slowing the economy, raising the risk of a recession and dragging on prices for stocks, bonds and other investments.

The much higher rates of today have already caused cracks to appear in the U.S. banking system. Fear is rising that the commercial real estate market could also be set to shake.

“We expect delinquencies on office loans to materially increase from today’s low levels,” Goldman Sachs strategists led by Lotfi Karoui wrote in a report. “The timing and the magnitude of losses stemming from delinquent CRE loans relative to previous cycles remain, however, uncertain.”

A bright spot for the economy arrived Monday with a report showing that manufacturing in New York state unexpectedly grew. Economists were expecting another month of contraction, as manufacturing has struggled under the weight of higher interest rates.

One of the biggest gains on Wall Street came from Prometheus Biosciences. It soared 69.7% after the biotechnology company announced over the weekend that it was being acquired by Merck for $200 per share, or about $10.8 billion. Merck slipped 0.3%.

In the bond market, the 10-year Treasury yield rose to 3.59% from 3.52% late Friday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, climbed to 4.19% from 4.10%.

In markets abroad, stocks jumped 1.4% in Shanghai. China’s central bank kept the one-year medium-term lending facility rate unchanged at 2.75%, suggesting economic growth data to be released Tuesday won’t be too alarming.

Stocks also rose across other Asian markets, while European indexes were mixed.

ASX 200 expected to fall​

The Australian share market looks set to give back yesterday’s gains despite a positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 17 points or 0.25% lower.

Wall Street drifted higher Monday to kick off the first full week of earnings reporting season.

The S&P 500 rose 13.68, or 0.3%, to 4,151.32 in its first trading after squeezing out its fourth winning week in the last five. The Dow Jones Industrial Average gained 100.71, or 0.3%, to 33,987.18, while the Nasdaq composite climbed 34.26, or 0.3%, to 12,157.72.

MARKET WATCH

 

[bigdog]

Stock market today: Asia trading mixed ahead of earnings

Asian shares are trading mixed as investors take a wait-and-see attitude stance of earnings reports and possible moves by central banks. Benchmarks fell in Tokyo, Hong Kong and Shanghai, but rose moderately in Sydney and Seoul. News that China’s economic growth accelerated in the latest quarter...

apnews.com

Stock market today: S&P 500 posts slight gain, Dow flat​

By STAN CHOE

NEW YORK (AP) — Wall Street closed Tuesday almost exactly where it began after a mixed set of profit reports led to a quiet, meandering day of trading.

The S&P 500 edged up by 3.55 points, or 0.1%, to 4,154.87 after drifting between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 10.55, or less than 0.1%, to 33,976.63, and the Nasdaq composite was down 4.31, or less than 0.1%, at 12,153.41.

Lockheed Martin was one of Wall Street’s bigger gainers. It climbed 2.4% after reporting a profit for the latest quarter that topped analysts’ expectations.

Bank of America rose 0.6% after its better-than-expected profit report led to an up-and-down day of trading. The majority of companies have been beating forecasts so far in the early days of this reporting season.

The bar, though, was low amid Wall Street’s worries about still-high inflation, much higher interest rates and slowing in some sections of the economy. Analysts came into this reporting season forecasting the sharpest drop in earnings per share for S&P 500 companies since the pandemic torpedoed the economy in 2020.

Several companies stumbled after failing to meet expectations. Goldman Sachs fell 1.7% after its revenue fell short of analysts’ forecasts, though earnings topped expectations.

Health care stocks were broadly weak and the heaviest weight on the S&P 500 out of the 11 sectors that make up the index. Johnson & Johnson fell 2.8% despite reporting stronger profit than expected and raising its dividend.

Coming up later this week will be reports from several dozen more companies in the S&P 500. They include big names such as AT&T, Tesla and Procter & Gamble.

Wall Street’s attention will also turn to smaller, regional banks set to report, such as KeyCorp and Zions Bancorp. Their stocks took a hit last month following the second- and third-largest U.S. bank failures in history.

The worry was that customers could pull their deposits out of banks together at once, similar to the runs that toppled Silicon Valley Bank and Signature Bank. Most of the focus has been on regional banks instead of the massive “too-big-to-fail” banks like JPMorgan Chase and Bank of America.

Those big banks have so far been reporting better profits than expected, and their immense size may have helped lure deposits amid the turmoil. They’ve also been the highlights of the earliest days of this reporting season, helping to add some calm to markets.

“It appears that major bank earnings announcements helped soothe investors nervousness for financial stocks reporting in the upcoming days,” Stefano Pascale and other analysts at Barclays said in a report.

A larger worry for the economy is that the banking industry’s woes could cause a pullback in lending. That in turn could add more pressure on an economy already straining under the weight of much higher interest rates.

The Federal Reserve has jacked rates up at a furious pace over the last year in hopes of slowing high inflation. High rates can suffocate inflation, but only by slowing the entire economy in one blunt action, raising the risk of a recession and hurting investment prices.

Inflation is slowing, but it’s still high, and traders widely expect the Fed to raise rates again at its next meeting in May.

Treasury yields have been climbing recently on such expectations, but they were easing a bit on Tuesday.

The 10-year yield fell to 3.57% from 3.61% late Monday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, slipped to 4.19% from 4.21%.

In markets abroad, stocks were mixed across Asia and modestly higher in Europe.

China’s economy accelerated in the first three months of the year and topped forecasts as consumers returned to shops and restaurants following the relaxation of anti-COVID restrictions. The hope is that stronger growth out of the world’s second-largest economy can help support the broader global economy. Still, some analysts remained cautious.

“This neither distracts from doubts around sustained growth recovery back above 5% nor does it adequately confirm recovery in private sector confidence critical to inspire a virtuous growth cycle,” said Tan Boon Heng at Mizuho Bank.

Analysts say new trade patterns will emerge since markets have been rocked by various political uncertainties such as the war in Ukraine, threatening supply chains and triggering fluctuations in consumer prices and moves by the world’s central banks.

“That period of relative stability may now be giving way to one of lasting instability resulting in lower growth, higher costs and more uncertain trade partnerships,” said Michael Every, global strategist at Rabobank. “Instead of more elastic global supply, we could face the risk of repeated supply shocks.”

ASX 200 expected to edge higher​

The Australian share market looks set to edge higher on Wednesday following a relatively positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points higher this morning.

Wall Street closed Tuesday almost exactly where it began after a mixed set of profit reports led to a quiet, meandering day of trading.

The S&P 500 edged up by 3.55 points, or 0.1%, to 4,154.87 after drifting between small gains and losses throughout the day. The Dow Jones Industrial Average slipped 10.55, or less than 0.1%, to 33,976.63, and the Nasdaq composite was down 4.31, or less than 0.1%, at 12,153.41.

MARKET WATCH

 

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Stock market today: Asian shares trading mostly lower

Shares are mostly lower in Asia in narrow trading after they barely budged again on Wall Street following a mixed batch of earnings reports from big U.S. companies. Shares edged higher in Tokyo and Sydney but fell in other regional markets. Oil prices also declined. On Wednsday, the S&P 500 was...

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Stock market today: Wall Street is mixed as calm continues​

By STAN CHOE

NEW YORK (AP) — Wall Street barely budged again on Wednesday following another set of mixed earnings reports from big U.S. companies.

The S&P 500 inched down by 0.35 points, or less than 0.1%, to 4,154.42. The Dow Jones Industrial Average slipped 79.62, or 0.2%, to 33,897.01, and the Nasdaq composite edged up by 3.81 points, or less than 0.1%, to 12,157.23.

Tesla weighed heavily on the market after the electric-vehicle company cut prices for its two top-selling models, its fourth price cut in the U.S. this year. That could be a signal Tesla is trying to spur sales amid shifting U.S. tax credits for electric vehicles. Tesla fell 2% before releasing its latest earnings report after trading closed.

Netflix slumped 3.2% after reporting weaker revenue for the latest quarter than analysts expected, though its profit topped forecasts.

Elevance Health dropped 5.3% despite reporting stronger profit and revenue than expected. The health insurer gave a forecast for earnings this year that fell short of some analysts’ expectations.

So far, most companies have been beating profit forecasts to clear a bar that was set particularly low. Analysts came into this reporting season forecasting the sharpest drop S&P 500 earnings since the pandemic torpedoed the global economy in 2020. Profits are under pressure because inflation is high, interest rates are much higher than a year ago and portions of the economy are slowing.

“That’s part of the reason why the market has been kind of directionless” recently, said Megan Horneman, chief investment officer at Verdence Capital Advisors. “We got mixed earnings, but not as bad as people expected.”

Intuitive Surgical leaped 10.9% for one of the biggest gains in the S&P 500 after delivering stronger profit and revenue for the latest quarter than expected.

Abbott Laboratories rose 7.8%, Nasdaq Inc. gained 3.1% and United Airlines flew 7.5% higher after they also topped Wall Street’s expectations for profits.

Particular focus has been on the health of banks after higher interest rates helped lead to the second- and third-largest U.S. bank failures in history last month.

The industry’s behemoths have largely reported better results than expected, with several saying they benefited from the industry’s turmoil as customers moved deposits to them and away from smaller banks that seemed at greater risk.

The fear was how much pain smaller, regional banks would show in their quarterly reports, including how many of their customers fled.

Western Alliance Bancorp., a Phoenix-based bank whose stock plunged nearly 64% over a five-day stretch last month, surged after it said deposits stabilized after an initial drop and have been rising in recent weeks. Its stock jumped 24.1%.

It helped lead the majority of financial stocks higher.

Synchrony Financial rose 1.8% after reporting better revenue than expected but weaker profit. Morgan Stanley rose 0.7% after topping forecasts for both profit and revenue.

In the bond market, yields climbed after a report showed U.K. inflation remained above 10% for a seventh straight month.

Central banks around the world have been raising rates at a furious pace for more than a year, and the wide expectation is for the Federal Reserve to raise short-term U.S. rates again at its meeting next month. High rates can stifle inflation, but only by slowing the entire economy, raising the risk of a recession and hurting prices for investments.

The yield on the 10-year Treasury rose to 3.59% from 3.58% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.25% from 4.20%.

Another fear for markets is that smaller and mid-sized banks could pull back on their lending amid all the industry’s struggles, which would clamp the brakes even tighter on the economy. The Federal Reserve said Wednesday that several of its 12 regional districts have noticed banks tightening lending standards recently.

“When I look at economic growth, there’s so many components of economic growth that are screaming we’re either in a recession or heading that way,” Horneman said.

She has been preparing for more turbulence in the stock market on expectations interest rates will stay high through the end of the year, despite forecasts by many traders that the Fed will cut rates.

In markets overseas, stock indexes were mixed in Europe. Asian stocks were mostly lower.

An earlier report showing China’s economic growth accelerated in the latest quarter has not had much of an impact on share prices. While consumption and retail sales have grown, other indicators, such as industrial output and fixed-asset investments, were weaker and indicate an uneven recovery.

“It may still be a worst-is-over story, but recovery has shown to be more gradual than a one-shot wonder,” Yeap Jun Rong, market analyst at IG, said in a report.

ASX 200 expected to edge lower​

The Australian share market is expected to have a subdued session on Thursday after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 7 points lower this morning.

Wall Street barely budged again on Wednesday following another set of mixed earnings reports from big U.S. companies.

The S&P 500 inched down by 0.35 points, or less than 0.1%, to 4,154.42. The Dow Jones Industrial Average slipped 79.62, or 0.2%, to 33,897.01, and the Nasdaq composite edged up by 3.81 points, or less than 0.1%, to 12,157.23.

MARKET WATCH

 

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Stock market today: Asian shares follow Wall Street lower

Shares are weaker in Asia after benchmarks dipped on Wall Street following mixed earnings reports from big companies and more signals the U.S. economy may be slowing. All regional benchmarks declined. Oil prices also fell. The S&P 500 fell 0.6% Thursday. Tesla weighed heavily on the market again...

apnews.com

Stock market today: Tesla, AT&T help drag Wall Street lower​

By STAN CHOE

NEW YORK (AP) — Stocks on Wall Street dipped Thursday following mixed earnings reports from big companies and more signals the U.S. economy may be slowing.

The S&P 500 fell 24.73, or 0.6%, to 4,129.79 after drifting listlessly earlier this week. The Dow Jones Industrial Average slipped 110.39, or 0.3%, to 33,786.62, while the Nasdaq composite dropped 97.67, or 0.8%, to 12,059.56.

Tesla weighed heavily on the market for a second straight day on worries about how much profit it’s making on each of its electric vehicles. It dropped 9.7% after reporting revenue for the first three months of the year that fell short of analysts’ expectations as it repeatedly cut prices on its models.

Tesla’s cutting prices “is good for inflation,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “But for the market, the question has to be: You’re cutting prices again, it seems like we’re not seeing enough demand on the auto side.”

“It’s still working its way through the system, higher rates for everyone. It’s more costly to buy a car, more costly to buy a house from a financing perspective.”

Several banks also dropped after reporting weaker profits and revenue than expected, including KeyCorp and Zions Bancorp. The spotlight has been particularly harsh on smaller and mid-sized banks amid worries their customers may pull out deposits following the second- and third-largest U.S. bank failures in history last month.

Zions fell 4.9%, and KeyCorp dropped 2.7%. Truist Financial fell 3.8% after reporting weaker profit than expected.

AT&T sank 10.4% after it reported slightly weaker revenue than analysts forecast, though profit squeaked past expectations. Analysts also pointed to weaker cash flow than some expected. It was the worst day for its stock in two decades and its second-worst since late 1983.

In the bond market, yields fell following a couple reports on the U.S. economy.

Slightly more workers filed for unemployment benefits last week than the week before, a potential signal that a still-strong job market is starting to soften under the weight of much higher interest rates. The number of continuing claims for jobless benefits also rose to the highest level since November 2021, according to Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

A separate report said that manufacturing trends in the mid-Atlantic region weakened by much more than economists expected.

They helped drag the yield of the 10-year Treasury down to 3.53% from 3.59% late Wednesday. The two-year yield, which more closely tracks expectations for the Federal Reserve, fell to 4.14% from 4.25%.

The Fed has intentionally been trying to cool the economy for more than a year in hopes of reining in high inflation. It does that by raising short-term interest rates. It’s an effective but blunt tool that slows the broad economy, raising the risk of a recession and hurting prices for investments.

The housing market was one of the first sectors to bend under the weight of much higher interest rates, as mortgage rates quickly climbed. A report on Thursday said sales of previously occupied homes slowed in March but remains above its bottom hit at the start of this year. The job market is typically later to fall under the weight of higher interest rates.

Helping to limit Wall Street’s losses Thursday were big gains from companies that topped analysts’ expectations.

Lam Research was one of the strongest forces pushing upward on the S&P 500 after the supplier for the semiconductor manufacturing industry rose 7.2%. It reported profit and revenue for the latest quarter that beat Wall Street’s forecast.

Steel Dynamics climbed 4.9%, homebuilder D.R. Horton gained 5.6%, casino operator Las Vegas Sands rallied 3.7% and steelmaker Nucor rose 5.5% after all also reported stronger profit for the latest quarter than expected.

Like casinos, several companies that offer experiences to customers have recently been reporting strong demand, Haworth said. That’s despite worries about a slowing economy.

“There’s a real question as to how much demand destruction will there be,” he said. “If we do get a recession, there will be demand destruction, and yet airline earnings: They’re not seeing demand destruction.”

Broadly, the majority of companies have been topping profit forecasts so far in the early days of this reporting season. That’s likely in large part because expectations were quite low coming into it.

Analysts were forecasting this would mark the sharpest drop in S&P 500 earnings per share since the pandemic was pounding the economy in 2020. Profits are under pressure as inflation remains high, interest rates are much higher than a year ago and portions of the economy slow.

In markets abroad, Asian stock indexes were mixed after data showed Japan’s trade deficit narrowed in March as exports rose more than expected. But exports to China fell, reflecting the slow pace of the recovery from pandemic disruptions.

European stocks were mixed.

ASX 200 expected to fall​

The Australian share market looks set to end the week in a disappointing fashion following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 38 points or 0.45% lower this morning.

Stocks on Wall Street dipped Thursday following mixed earnings reports from big companies and more signals the U.S. economy may be slowing.

The S&P 500 fell 24.73, or 0.6%, to 4,129.79 after drifting listlessly earlier this week. The Dow Jones Industrial Average slipped 110.39, or 0.3%, to 33,786.62, while the Nasdaq composite dropped 97.67, or 0.8%, to 12,059.56.

MARKET WATCH

 

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Stock market today: Stocks close quiet week with small gains

Stocks finished with slight gains on Wall Street as investors closed out a quiet week highlighted by a batch of mostly mixed corporate earnings reports. The S&P 500, Dow Jones Industrial Average and Nasdaq all gained 0.1% Friday. Among the companies that reported results, hospital operator HCA...

apnews.com

Stock market today: Stocks close quiet week with small gains​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks capped a listless day of trading Friday with slight gains for the major stock indexes, closing out a quiet week on Wall Street highlighted by a batch of mostly mixed corporate earnings reports.

The S&P 500, Dow Jones Industrial Average and Nasdaq composite all gained 0.1% after drifting between small gains and losses for most of the day. The indexes each posted a slight loss for the week.

Health care companies and a range of consumer product makers gained ground, tempering losses in banks, technology stocks and elsewhere. Truist Financial and KeyCorp, two of the larger regional banks, were among the biggest decliners in the S&P 500. Truist fell 6% and KeyCorp ended 3.7% lower.

Bond yields held relatively steady. The yield on the 10-year Treasury, which influences mortgage rates and other loans, rose to 3.56% from 3.54% late Thursday.

Trading was muted as investors focused on the latest corporate earnings reports and forecasts in a bid to get a better sense of how companies are handling high inflation, a slowing economy and fears about a recession.

“You have a market that’s in waiting mode,” said Quincy Krosby, chief global strategist for LPL Financial. “It’s waiting for a sense of what we’re going to hear from companies.”

Investors reviewed a handful of earnings reports Friday. Hospital operator HCA Healthcare rose 3.9% after the company topped estimates for the first quarter and raised its full-year profit forecast. Procter & Gamble, the maker of Charmin toilet paper and other iconic consumer products, rose 3.5% after beating estimates thanks to price increases.

Information technology services company PC Connection fell 4.9% after giving investors a disappointing financial update. Regional bank Regions Financial fell 2.8% after reporting discouraging earnings.

Companies have so far been beating Wall Street forecasts this earnings period. Analysts had forecast this would mark the sharpest drop in S&P 500 earnings per share since the pandemic stunned the economy in 2020. Analysts polled by FactSet expect profits to contract by 6.3% for companies in the S&P 500.

Several big companies are on deck to report earnings next week, giving investors another heavy few days of corporate updates. Coca-Cola reports its latest results on Monday, followed by McDonald’s and Google’s parent company, Alphabet, on Tuesday.

Airplane maker Boeing and Meta Platforms, Facebook’s parent, will report results on Wednesday. Investors will get more details on the health of the airline industry when American Airlines and Southwest Airlines report financial results on Thursday, along with internet retail giant Amazon.

The busy week of earnings reports could help provide more direction for investors as recession worries linger, Krosby said.

“There’s a tug of war between what the economic data is saying and the message from equity markets,” she said.

The latest earnings come as investors worry about the potential for a recession amid the Federal Reserve’s fight against inflation. The central bank aggressively raised interest rates through 2022 and into 2023. The rate hikes have weighed on economic growth and while inflation has eased it remains high and is still squeezing consumers.

The Fed will meet again in early May and is expected to raise its benchmark interest rate by another quarter point. Wall Street is betting that the Fed will take a break from raising interest rates after that meeting.

The yield on the two-year Treasury, which more closely tracks expectations for the Fed, rose to 4.17% from 4.16% late Thursday.

Wall Street is anticipating more economic data next week that could provide greater insight into inflation’s impact and the economy’s path. The reports will included consumer confidence for April, first-quarter gross domestic product and another government update on prices and inflation.

All told, the S&P 500 rose 3.73 points to 4,133.52. The Dow added 22.34 points to close at 33,808.96. The Nasdaq rose 12.90 points to 12,072.46. Decliners held a slight edge over gainers on the New York Stock Exchange.

Markets in Europe also ended with small gains Friday, while exchanges in Asia declined overnight.

 

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ASX 200 expected to fall​

The Australian share market looks set to fall on Monday following a poor finish to last week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 8 points or 0.1% lower this morning.+

New York Stocks capped a listless day of trading Friday with slight gains for the major stock indexes, closing out a quiet week on Wall Street highlighted by a batch of mostly mixed corporate earnings reports.

The S&P 500, Dow Jones Industrial Average and Nasdaq composite all gained 0.1% after drifting between small gains and losses for most of the day. The indexes each posted a slight loss for the week.

All told, the S&P 500 rose 3.73 points to 4,133.52. The Dow added 22.34 points to close at 33,808.96. The Nasdaq rose 12.90 points to 12,072.46. Decliners held a slight edge over gainers on the New York Stock Exchange.

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ASX IS CLOSED TODAY FOR ANZAC DAY HOLIDAY - LEST WE FORGET

Today is ANZAC Day. Our national day of commemoration for those who served, suffered and died in wars and war-like conflicts.

Stock markets today: Asia mixed ahead of US earnings

Asian stocks are mixed after Wall Street edged higher as investors awaited U.S. earnings reports and an update on economic growth. Shanghai and Hong Kong declined while Tokyo advanced. Oil prices were little changed. Wall Street’s benchmark S&P 500 index gained 0.1% after Coca-Cola Co. announced...

apnews.com

Stocks stand still ahead of raft of earnings, economic data​

By STAN CHOE

NEW YORK (AP) — Wall Street remained stuck in its standstill Monday, and stocks again moved only modestly ahead of reports that could offer more direction on where the economy and corporate profits are heading.

The S&P 500 edged up by 3.52 points, or 0.1%, to 4,137.04 after barely budging last week. The Dow Jones Industrial Average rose 66.44, or 0.2%, to 33,875.40, while the Nasdaq composite slipped 35.25, or 0.3%, to 12,037.20.

Coca-Cola slipped 0.2% after it reported stronger-than-expected profit for the first quarter but refrained from raising forecasts for sales and other measures for the full year. It was the only company in the S&P 500 to report Monday morning, but more than 170 others are scheduled to follow it this week.

The question is whether they can top the low bar that Wall Street has set for them, and what CEOs say about their prospects for profits later this year. Analysts expect S&P 500 companies to report their worst drop in earnings since the spring of 2020, when the pandemic paralyzed the economy.

Some of Wall Street’s most influential companies are set to report this week, including Microsoft on Tuesday and Amazon on Thursday. Several of these Big Tech stocks were among the heaviest weights on the market. Microsoft fell 1.4%, and Amazon dipped 0.7%.

Fox fell 2.9% after it said the popular but polarizing prime-time host Tucker Carlson is leaving Fox News. The move comes less than a week after the company reached a $787.5 million settlement over charges that it promoted lies about Dominion Voting Systems through its 2020 election coverage.

Bed Bath & Beyond was another loser, dropping 35.7% to 19 cents after filing for bankruptcy protection. The struggling retailer’s stock has been on a wild ride as investors bet on whether it could successfully turn around its operations.

The majority of companies so far this earnings reporting season have been topping forecasts, as is usually the case. That’s partly because expectations were so low coming into it. Inflation remains high, and interest rates are much higher than a year earlier, which has hurt swaths of the economy.

The Federal Reserve has jacked up rates at a furious pace in hopes of undercutting high inflation. High rates can do that but only by bluntly slowing the entire economy. That ups the chances for a recession, while also hurting prices for investments.

Besides this week’s blizzard of earnings reports, Wall Street is also waiting for the first estimate of how quickly the U.S. economy grew in the first three months of the year, among other data. Economists predict it will show a slowdown to growth of 1.9% at an annual rate, down from 2.6% in the fourth quarter.

Higher rates have already slowed the housing market by making mortgages more expensive. Manufacturing and other areas of the economy have also shown pain, while the job market has remained remarkably resilient.

The report on the U.S. economy will be one of the final pieces of data before the Federal Reserve’s next meeting, scheduled for next week. Much of Wall Street expects it to raise interest rates at least one more time, before likely taking a pause.

Many traders are betting the Fed will have to cut rates later this year in order to prop up the economy. But the Fed has so far been insistent that it will hold rates high at least through the end of this year. .

“The Fed seems determined to fight inflation even if a more significant slowdown arrives,” Morgan Stanley strategists led by Michael Wilson wrote in a report.

High rates have already caused cracks in the banking system, with the second- and third-largest US. bank failures in history rocking markets last month. The worst of the crisis seems to have passed, but scrutiny remains harsh on smaller and mid-sized banks that seem to be under the most threat of seeing customers yank their deposits.

First Republic Bank, which has been at the center of the spotlight, reported its latest quarterly results after trading ended Monday. Its stock jumped 12.2% before the report for the biggest gain in the S&P 500. Afterward, it fell in afterhours trading immediately after releasing its report.

The banking industry’s struggles were global, as higher interest rates worldwide pushed investors to hunt for potential weak links. Credit Suisse, a giant investment bank, said Monday that it saw more than 61 billion Swiss francs (nearly $69 billion) in outflows during the first three months of the year. It’s in the process of getting swallowed by rival UBS after regulators arranged for its takeover.

In the bond market, the yield on the 10-year Treasury fell to 3.50% from 3.57% late Friday.

 

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Stock market today: Asian stocks dip on economy worries

Asian shares are trading mostly lower as worries about the health of global economies grew after a tumble on Wall Street, despite some better-than-expected earnings reports. Shares fell Wednesday in Tokyo, Sydney, Seoul and Shanghai, while edging higher in Hong Kong. Analysts are pointing to a...

apnews.com

Stock market today: Stocks tumble on profit, economy worries​

By STAN CHOE

NEW YORK (AP) — Wall Street tumbled Tuesday to its worst day in a month on worries about the strength of corporate profits and the economy following some mixed reports.

The S&P 500 fell 1.6% to break out of a weekslong lull. The Dow Jones Industrial Average dropped nearly 345 points, or 1%, while the Nasdaq composite sank 2%.

First Republic Bank had the biggest loss in the S&P 500 by far, and its stock nearly halved after it said customers withdrew more than $100 billion during the first three months of the year. That doesn’t include $30 billion in deposits that big banks plugged in to build faith in their rival after the second- and third-largest U.S. bank failures in history shook confidence.

The size of the drop in deposits renewed worries about the U.S. banking system and the risk of an economy-sapping pullback in lending. That overshadowed First Republic’s beating analysts’ expectations for earnings, and its stock plunged 49.4%

The majority of companies so far this reporting season have been topping expectations, but the bar was set considerably low. Analysts are forecasting the worst drop in S&P 500 earnings since the spring of 2020, when the pandemic froze the global economy. That’s why Wall Street is focused just as much, if not more, on what companies say about their future prospects as they do about their past three months.

WHY UPS WAS LOWER

UPS fell 10% after it met profit forecasts but said it made less in revenue than expected. It also said its revenue for the full year will likely come at the low end of its prior forecast, citing a challenging economy and other factors.

Danaher was another big weight on the market, falling 8.8% despite reporting better earnings and revenue than expected. Analysts pointed to its trimming back its forecast for a key revenue measure over the course of the year.

On the winning side, PepsiCo rose 2.3% after beating profit expectations. Homebuilder PulteGroup rose 1.7% after also topping forecasts.

TECH EARNINGS

The heart of earnings reporting season is approaching, and more heavy hitters arrived after trading closed for the day.

Microsoft and Google’s parent company, Alphabet, both rose in afterhours trading after reporting profits above expectations. Because they’re two of the biggest companies on Wall Street by market value, their stock movements carry extra weight on the S&P 500 and other market indexes.

Broad stock indexes had been making only modest moves so far this earnings reporting season. The S&P 500 barely budged last week and ticked up just 0.1% on Monday. But volatility strategists at Barclays said the calm was unlikely to last for the long term.

The economy is under stress from high interest rates meant to get inflation under control. High rates can stifle inflation, but only by putting the brakes on the entire economy and hurting investment prices. Big chunks of the economy outside the job market have already begun to slow or contract.

With so much uncertainty about whether inflation can return to the Federal Reserve’s target without causing a recession, “we remain skeptical that markets are out of the woods,” Barclays strategists led by Stefano Pascale said in a report. They also pointed to “the risk of something breaking” in the financial system because of high rates.

ECONOMY WORRIES

A report on Tuesday showed that confidence among consumers fell more sharply in April than expected, down to its lowest level since July. That’s a discouraging signal when consumer spending makes up the biggest part of the U.S. economy.

A separate report was more encouraging, saying sales of new homes rose by more than expected. The housing industry has been under pressure because higher mortgage rates are squeezing buyers.

On Thursday, the U.S. will give its first estimate of how much the economy grew during the first three months of the year. Economists expect to see growth cooled to a 1.9% annual rate, down from 2.6% at the end of 2022.

Much of the slowdown is due to the Fed’s barrage of hikes to interest rates over the last year. The Federal Reserve meets next week, and much of Wall Street expects it to raise interest rates at least one more time before pausing.

Beyond higher interest rates, Wall Street is also worried that the struggles of the U.S. banking industry could tighten the brakes even further on the economy. First Republic said its deposits have stabilized since late March, but it’s still working to cut expenses. If it and other banks pull back on lending, it could lead to lower growth across the economy.

All told, the S&P 500 fell 65.41 points to 4,071.63. The Dow dropped 344.57 to 33,530.83, and the Nasdaq fell 238.05 to 11,799.16.

In the bond market, the yield on the 10-year Treasury fell to 3.39% from 3.50% late Monday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for Fed action, fell to 3.95% from 4.11%.

In markets overseas, stock indexes closed mostly lower in Europe and were mixed across Asia overnight.

ASX 200 expected to fall​

The Australian share market looks set to fall on Wednesday following a difficult night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 38 points or 0.5% lower this morning.

Investors were hitting the sell button after US-based First Republic Bank’s earnings release reignited concerns about the sector.

Wall Street tumbled Tuesday to its worst day in a month on worries about the strength of corporate profits and the economy following some mixed reports.

The S&P 500 fell 1.6% to break out of a weeks long lull. The Dow Jones Industrial Average dropped nearly 345 points, or 1%, while the Nasdaq composite sank 2%.

All told, the S&P 500 fell 65.41 points to 4,071.63. The Dow dropped 344.57 to 33,530.83, and the Nasdaq fell 238.05 to 11,799.16.


MARKET WATCH

 

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Stock market today: Bank fears send Asia shares mostly lower

Asian shares mostly fell Thursday, echoing a decline on Wall Street, as worries about the U.S. banking sector and inflationary pressures weighed on investor sentiment.

apnews.com

Stock market today: First Republic falls more, tech rallies​

By STAN CHOE

NEW YORK (AP) — Wall Street fell again Wednesday, though a rally for Microsoft and some other Big Tech stocks helped to limit the losses.

The S&P 500 dropped 15.64 points, or 0.4%, to 4,055.99. The Dow Jones Industrial Average fell 228.96, or 0.7%, to 33,301.87, while the Nasdaq composite led the market with a gain of 55.19, or 0.5%, to 11,854.35.

Wall Street was coming off its worst day in a month, hurt by concerns about the strength of U.S. banks. The spotlight has been harshest on First Republic Bank, which lost another 29.8% after nearly halving the day before. That’s when it gave details about how many customers bolted amid last month’s turmoil in the industry.

The worry is that it and other smaller and mid-sized banks could suffer debilitating runs of deposits from customers, similar to the ones that caused last month’s failures of Silicon Valley Bank and Signature Bank. Even without more shutdowns, the industry’s struggles could cause a pullback in lending by banks that saps the economy.

PacWest Bancorp., another bank that’s been in investors’ spotlight, rose 7.5% after reporting stronger results than expected and saying that its deposits have grown since late March. That may offer optimism that First Republic’s struggles could be specific to itself, rather than a symptom of deeper issues with the system.

Also dropping sharply Wednesday was Enphase Energy, which fell 25.7% despite reporting stronger profit and revenue for the latest quarter than forecast. Analysts pointed to its revenue forecast for the current quarter, which fell short of some expectations.

The majority of companies have been topping expectations so far this reporting season, but the low bar set for them has many investors paying more attention to what CEOs say about upcoming trends than results for the past three months.

Activision Blizzard, meanwhile, tumbled 11.4% after U.K. regulators blocked its takeover by Microsoft on concerns it would hurt competition in the cloud gaming market.

BIG TECH BLOOMS

While the majority of stocks fell, gains for Microsoft and other Big Tech companies prevented a sharper slide for the market.

Microsoft rose 7.2% after reporting stronger profit for the first three months of the year than analysts expected. It carries a huge weight on the S&P 500 because it’s the second-largest stock in the index.

Tech stocks have broadly been some of the year’s best performers so far as they’ve laid off workers and made other cost cuts to improve their profitability. Hopes for a coming pause from the Federal Reserve on its barrage of hikes to interest rates have also helped them in particular.

Google’s parent company, Alphabet, also turned a bigger profit than expected. But its stock slipped 0.2% after drifting between gains and losses through the day. It reported its first back-to-back drops in advertising revenue from a year earlier since it became a publicly traded company in 2004.

More Big Tech companies are scheduled to follow with their own reports soon. Facebook’s parent company, Meta Platforms, rose 0.9% ahead of its report. It jumped in afterhours trading after it said it earned more than expected.

WHY CHIPOTLE IS HIGHER

Chipotle Mexican Grill rose 12.9% for the biggest gain in the S&P 500 after reporting stronger profit than expected. It was one of a few companies that raised hopes consumer spending could remain resilient despite a slowing economy. That’s key because it makes up the bulk of the U.S. economy.

Stocks have been mostly listless in recent weeks, as Wall Street struggles with several questions. With few answers imminent, Mark Haefele, UBS Global Wealth Management’s chief investment officer, expects stocks to stay stuck in a range.

Not only are investors worried about the possibility of a recession this year, he said stocks also look relatively expensive. That means “the scope for upside appears limited, in our view,” he said.

Scott Wren, senior global market strategist at Wells Fargo Investment Institute, sees the S&P 500 largely remaining within a range of 3,700 to 4,200 this year. It’s within the top half of that range, and he said he’s not looking to “chase this equity rally.”

THE FED AND RATES

All banks are contending with much higher interest rates, which have flown higher over the past year to tighten the screws on the economy and financial markets.

The Federal Reserve has hiked its key overnight interest rate to its highest level since 2007. It’s trying to rein in high inflation, but its main tool to do so is a notoriously blunt one. High rates slow the entire economy and hurt prices for investments.

That has many investors and economists preparing for a possible recession. Besides the cracks in the banking system, high rates have already slowed the housing, manufacturing and other industries. The job market, meanwhile, remains relatively solid.

A report on Wednesday showed that orders for long-lasting manufactured goods were stronger in March than expected.

In the bond market, the yield on the 10-year Treasury rose to 3.43% from 3.40% late Tuesday. It helps set rates for mortgages and other loans. The two-year Treasury yield, which more closely tracks expectations for the Fed, fell to 3.92% from 3.95% late Tuesday.

ASX 200 expected to fall​

The Australian share market is expected to have a poor session on Thursday after a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 16 points lower this morning.

Wall Street fell again Wednesday, though a rally for Microsoft and some other Big Tech stocks helped to limit the losses.

The S&P 500 dropped 15.64 points, or 0.4%, to 4,055.99. The Dow Jones Industrial Average fell 228.96, or 0.7%, to 33,301.87, while the Nasdaq composite led the market with a gain of 55.19, or 0.5%, to 11,854.35.

MARKET WATCH