By Stan Cho, Associated Press
9 minutes ago
New York Stock Exchange listed in New York on May 7, 2024. Wall Street oscillated between modest losses and gains before the opening bell as more corporate results were announced in what was expected to be a relatively quiet week. (AP Photo/Peter Morgan)
NEW YORK (AP) – U.S. stocks were relatively stable Tuesday as trading on Wall Street eased after recent volatility.
The S&P 500 rose 0.2% in early trading, snapping a strong three-day winning streak. As of 9:35 a.m. ET, the Dow Jones Industrial Average was up 54 points, or 0.1%, and the Nasdaq Composite was up 0.2%.
Kenvue, whose brands include Band-Aids and Tylenol, beat analyst expectations for both profit and sales in its latest quarter, rising 4.9%.
Walt Disney Co. fell 8.5% despite reporting better-than-expected results for the latest quarter. Revenue was slightly lower than expected, and the company expects its entertainment streaming business to slow this quarter.
The company is at the tail end of companies reporting financial results for the first three months of the year. The majority of companies have beat earnings estimates so far, but their stock prices haven’t risen as much since then as they usually do, according to FactSet. Not only that, but companies whose profits fall short of expectations will see their stock prices drop more the next day than they have in the past.
This may suggest that investors are listening to critics who have said that stocks are generally too expensive following this year’s record rally in the U.S. stock market. be. For stock prices to rise further, either earnings will have to grow more dynamically or interest rates will have to fall.
The latter possibility still appears to be on Wall Street after some events over the past week that traders found encouraging.
Federal Reserve Chairman Jerome Powell has strongly suggested that the central bank is still moving closer to cutting key interest rates rather than raising them, even though inflation has remained high this year. . Meanwhile, Friday’s weaker-than-expected jobs report suggests the U.S. economy can strike a balance between not doing well enough to keep inflation high but remaining strong enough to avoid a bad recession. suggested.
After rising earlier this year as hopes for a Fed rate cut faded, U.S. Treasury yields have fallen this month, providing some relief to stock markets. .
The yield on the 10-year U.S. Treasury note fell to 4.44% from 4.49% late Monday. The two-year Treasury yield fell to 4.81% from 4.83%, a move more in line with the Fed’s expectations.
Although yields have fallen over the past week, Wells Fargo Investment Institute strategists still expect long-term yields to remain high for some time. One reason for this is the widespread view that inflation expectations will remain higher than desired for some time. Global fixed income strategist Luis Alvarado expects 10-year Treasury yields will likely remain near their recent range.
Elsewhere on Wall Street, Crocs soared 9% after reporting better-than-expected profits and revenue. benefited from strong international growth.
International Flavors & Fragrances, which makes ingredients used in food and fragrances, rose 5.7% after reporting better-than-expected profits and revenue. The company also predicted that full-year sales would reach the upper end of its forecast range.
In overseas stock markets, indexes rose 2.2% in Seoul and 1.6% in Tokyo, but the results were mixed in other Asian regions. Australia’s S&P/ASX 200 index rose 1.4% after the Central Bank of Australia decided to keep interest rates on hold.
European stock indexes also rose.
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AP Business writers Matt Ott and Elaine Kurtenbach contributed.
