World News | Stock Market Today: Wall Street Edges Lower in Quiet Trading
Get latest articles and stories on World at LatestLY. Stocks are slipping on Wall Street Tuesday following some mixed earnings reports. Several beaten-down banks are also dropping more after a brief respite from a brutal run.
New York, May 9 (AP) Stocks are slipping on Wall Street Tuesday following some mixed earnings reports. Several beaten-down banks are also dropping more after a brief respite from a brutal run.
The S&P 500 was 0.3 per cent lower in early trading. The Dow Jones Industrial Average was up 25 points, or 0.1 per cent, at 33,644, as of 9:58 a.m. Eastern time, while the Nasdaq composite was 0.4 per cent lower.
Paypal Holdings fell 10.6 per cent despite reporting better profit and revenue for the latest quarter than expected. Analysts pointed to its forecast for how much profit it expects to wring out of each USD 1 of revenue, which may have disappointed some investors.
Electric automaker Lucid Group dropped 8.4 per cent after reporting a worse loss than expected for the latest quarter. Other EV stocks including Rivian and Nikola also sank.
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Skyworks Solutions sank 6.5 per cent after reporting profit for the first three months of the year that matched forecasts. The semiconductor company's comments about weakness in demand from China for Android phones may have frightened investors.
On the winning side of Wall Street were DaVita and McKesson after each reported stronger profit than expected. DaVita jumped 13 per cent, while McKesson climbed 8.4 per cent.
So far this earnings reporting season, which is approaching its final stretch, the majority of companies have been topping forecasts for first-quarter results. That's largely because expectations were set quite low due to a slowing economy and high interest rates. Companies in the S&P 500 are still on track to report a second straight quarter of weaker profits from year-earlier levels.
The better-than-feared results have given some support to Wall Street when many other worries are weighing on it.
Key among them is what will happen to the US banking system, which is under stress following three big bank failures since March. Hurt by much higher interest rates, smaller and mid-sized banks are scrambling to reassure investors and customers that their deposits are stable and that they aren't at risk of a sudden exodus of customers.
After finding some stability in the two prior days, stocks of regional banks under the heaviest scrutiny by Wall Street fell again Tuesday. PacWest Bancorp dropped 5.7 per cent, and Western Alliance Bancorp fell 4.8 per cent.
The next big milestone for the market will be Wednesday's report on inflation at the consumer level. Inflation has come down from its peak last summer, but it's remaining stubbornly high. That's raised uncertainty about what the Federal Reserve's next move will be.
The central bank has already yanked its benchmark interest rates to a range of 5 to 5.25 per cent, up from from virtually zero early last year. High rates can smother inflation, but only by slowing the economy and hurting investment prices bluntly.
Many investors are preparing for a recession to hit later this year because of much higher rates, as well as the potential for banks to pull back on lending because of their industry's troubles.
Looming over it all is a June 1 deadline. That's when the US government could potentially run out of cash to pay its bills unless Congress allows it to borrow more. The widespread expectation is that Congress will come to a deal before that deadline because the alternative would be widespread damage to the economy and financial markets.
But each day that passes without a deal raises concerns a bit more. President Joe Biden will meet with leaders from Congress after US stock markets close for trading Tuesday.
Worries about weakening demand sent crude oil slipping. Stocks also dropped in Shanghai, down 2.1 per cent, after a report showed that imports to China slumped sharply last month.
In the bond market, the 10-year Treasury yield was holding steady at 3.51 per cent. The two-year Treasury yield, which moves more on expectations for the Fed, rose to 4.02 per cent from 4.00 per cent late Monday. (AP)
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)