NEW YORK (AP) — With the Federal Reserve’s meeting out of the way, Wall Street awaited reports on profits from one of the most influential stocks and the health of the nation’s job market Thursday. US stocks are drifting.
The S&P 500 rose 0.3% in morning trading yesterday after the US Federal Reserve said it likely would postpone its interest rate cuts but had no plans to raise them. As of 10:25 a.m. ET, the Dow Jones Industrial Average was up 142 points, or 0.4%, and the Nasdaq Composite was up 0.5%.
Bond markets were also relatively quiet ahead of Friday’s U.S. government report on the number of jobs employers added last month. It is one of the most anticipated economic reports of the month, and economists expect it to show a slowdown in employment.
Meanwhile, Apple is expected to announce how much it made in early 2024 after the close of trading on Thursday. This is the latest report in a group of stocks known as the Magnificent Seven that drove much of the market’s rally last year. Apple shares rose 1.3%.
Earnings reports from other companies were helping drive the market. Qualcomm rose 9% after its latest quarter’s profit and revenue beat expectations. The company also revealed its expected range for future sales and profits, with the midpoint exceeding analyst expectations.
Carvana rose 33.9%, boosted by better-than-expected sales, after the used car retailer reported its latest quarterly results that far exceeded analysts’ expectations.
MGM Resorts International rose 3.9% as profit and revenue also beat expectations. This is due to an increase in traffic at MGM China as COVID-19 restrictions are lifted in Macau.
These helped offset Etsy’s 16.2% decline, which was only roughly in line with analysts’ earnings and revenue expectations. The report cited a “remaining challenging” environment with customers generally becoming more selective when purchasing non-essentials.
DoorDash reported worse-than-expected losses, falling 12.8%. The company, which has been increasing spending on payroll and research and development, also provided a range of expected underlying earnings trends for the quarter, with the midpoint falling short of analysts’ expectations.
Peloton Interactive fell 7.5% after an early rise after announcing it would cut about 400 jobs as part of a $200 million annual cost-cutting program. The company also announced that its CEO, Barry McCarthy, will step down. The company’s stock price fell to an all-time low last week.
Linde, one of the most heavily weighted stocks in the S&P 500 index, fell 5.3% despite reporting better-than-expected results for the latest quarter. The industrial gases and engineering company’s revenue fell short of Wall Street expectations and also missed the midpoint of its earnings forecast range for the current quarter.
In the bond market, which has helped drive much of the recent stock market movements, yields were mixed following some economic reports.
One showed fewer U.S. workers applied for unemployment benefits last week than economists expected. This is the latest sign that the job market remains strong despite high interest rates.
Another potentially even more disappointing report suggested that growth in what U.S. workers produce per hour worked in early 2024 will be weaker than economists expected. On the other hand, indicators comparing labor costs and productivity rose more than preliminary estimates. That could put upward pressure on inflation, one of Wall Street’s biggest concerns.
The economy is in dire straits and is expected to remain strong enough not to fall into recession, but not so strong that it will worsen already stagnant inflation.
With inflation readings stubbornly high this year, Federal Reserve Chairman Jerome Powell said on Wednesday that he needed to have enough confidence that inflation was under control before cutting interest rates, saying that he needed “more than previously expected.” It’s going to take some time,” he said.
The Fed’s key interest rate remains at its highest level since 2001, and a rate cut would relieve some pressure on the economy and financial markets.
Traders entered this year expecting at least six rate cuts in 2024, but are now betting big on just one or two, if any, cuts, according to CME Group data.
The yield on 10-year government bonds remained unchanged at 4.63%. The two-year Treasury yield moved more in line with the Fed’s expectations, falling to 4.92% from 4.97% late Wednesday.
In overseas stock markets, indexes were mixed in Asia and Europe. Hong Kong’s Hang Seng Market rose 2.5% while other Chinese markets were closed for public holidays.
___
Associated Press writers Matt Ott and Zimo Zhong contributed.
