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Wall Street Weakens Again Tuesday 04/16 09:09
Most U.S. stocks are weakening again Tuesday, as continued worries about
high interest rates compete with strong profit reports from some big companies.
NEW YORK (AP) -- Most U.S. stocks are weakening again Tuesday, as continued
worries about high interest rates compete with strong profit reports from some
big companies.
The S&P 500 was 0.3% lower in early trading, coming off a sharp loss after
bending under the pressure from a jump in Treasury yields. The Dow Jones
Industrial Average was up 78 points, or 0.2%, as of 9:45 a.m. Eastern time, and
the Nasdaq composite was 0.4% lower.
A 5.8% climb for UnitedHealth helped support the market after the insurer
reported stronger profit and revenue for the first three months of the year
than analysts expected. Morgan Stanley was another winner, rising 2.1%, after
likewise topping expectations.
But the majority of stocks on Wall Street were falling. PNC Financial
dropped 3.3% after reporting weaker revenue than analysts expected. Johnson &
Johnson sank 2.2% despite also reporting stronger profit for the latest quarter
than expected. Its revenue came in a whisper below forecasts.
Companies are under even more pressure than usual to report fatter profits
and revenue because the other lever that sets stock prices, interest rates,
looks unlikely to add much lift soon.
Traders are pushing out forecasts for when the Federal Reserve can begin
cutting its main interest rate, which is at the highest level in more than two
decades. A string of reports showing inflation and the overall economy remain
hotter than forecast is raising worries the Fed will have to keep rates high
for much longer than expected to win the last bit of improvement needed for
inflation to ease to its 2% target.
After jumping Monday on stronger-than-expected data on sales at U.S.
retailers last month, Treasury yields rose again following a speech by the vice
chair of the Federal Reserve.
Philip Jefferson said his expectation is for inflation to keep easing and
for the Fed to hold its main rate "steady at its current level." That contrasts
with what he said in February, when he said "it will likely be appropriate to
begin dialing back policy restraint at some point this year" if things went as
he expected.
Fed Chair Jerome Powell will also be speaking in the afternoon, and that
could send more swings through financial markets as traders trim their
forecasts for how many cuts to rates may arrive this year. After coming into
2024 expecting the Fed to cut rates six times or more, according to data from
CME Group, traders are now mostly calling for just one or two reductions.
The yield on the 10-year Treasury climbed to 4.68% from 4.61% late Monday
and from 4.52% before the weekend.
The yield on the two-year Treasury, which more closely tracks expectations
for Fed action, rose to 4.96% from 4.91% late Monday.
In stock markets abroad, indexes tumbled across Asia and Europe as they
caught up with the drubbing Wall Street took on Monday. Stock indexes fell 2.1%
in Hong Kong, 2.3% in Seoul and 1.4% in Paris.
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