Stock Market Today: Wall Street Nears Records as Earnings Report Season Heats Up | National News

NEW YORK (`) — Wall Street held steady at record highs Tuesday as earnings reporting season begins for major U.S. companies.

The S&P 500 rose 0.1% in morning trading. The Dow Jones Industrial Average fell 68 points, or 0.2%, a day after breaking above 38,000 for the first time. The Nasdaq Composite was 0.1% higher at 10:30 a.m. Eastern Time.

Procter & Gamble rose 5% after the company behind Charmin and Olay posted a higher profit than analysts expected in its latest quarter. The company benefited from price increases for its products and raised its profit forecast for the full fiscal year.

United Airlines rose 5.6% after the company also reported higher profits than analysts expected for the final three months of 2023. The company reported higher sales to customers on both basic economy and premium seats, but warned it could lose money in the first three months of this year due to the grounding of its Boeing 737 Max 9 planes.

They helped offset 3M's 10.2% decline. The maker of sticky notes and command strips reported better-than-expected profit for the end of 2023, but also gave profit forecast for this year that fell short of analysts' expectations.

Earnings season is picking up steam and more than a dozen companies in the S&P 500 released their latest quarterly results on Tuesday morning. More than 50 more are expected to follow later this week, including Tesla and Intel.

Headlines on Tuesday included Johnson & Johnson, which fell 2.1% after reporting weaker-than-expected profit. Verizon Communications rose 5.9% after beating analysts' profit estimates. Housebuilder DR Horton fell 8.7% after reporting weaker-than-expected profit.

Expectations for corporate profits at the end of 2023 are relatively low. Analysts have forecast companies in the S&P 500 to deliver weaker overall earnings per share than a year earlier, which would be the fourth such decline in the past five quarters, according to FactSet.

Still, stocks rose to record highs, and the S&P 500 hit an all-time high last week for the first time in two years. Much of this is due to expectations that the Federal Reserve will cut interest rates several times this year after raising them sharply over the past two years.

Such cuts can drive up investment prices while easing pressure on the economy and financial system. The Federal Reserve itself has said it may cut interest rates three times this year if inflation cools, which would allow the central bank to loosen control over the economy.

Treasury yields have already fallen sharply since the fall on expectations of impending interest rate cuts, although critics warn that Wall Street may be exaggerating again in its forecasts of how many rate cuts will come and how soon the Fed will begin them.

Bond market returns were mixed on Tuesday. The 10-year Treasury yield rose to 4.14% from 4.11% late Monday, but is still well below its 5% level in October.

The “everything rally” that began late last year on hopes of a Fed reversal likely prompted mutual fund managers to scramble to increase their holdings in stocks to keep up. Even as stocks took a bit of a breather at the start of 2024, investors “remained unconcerned about downside risk,” according to Barclays strategists led by Venu Krishna. That could leave “less room for fundamental upside from here.”

In overseas stock markets, Hong Kong's Hang Seng rose 2.6%, recouping some of its sharp losses so far this year on hopes that Chinese authorities might take action to support markets. The Hang Seng is still down almost 10% so far this young year, reflecting concerns about a weak recovery in the world's second-largest economy.

Japan, one of the world's best-performing countries, has seen a decline year-to-date despite the Bank of Japan maintaining its interest rate policy at ultra-loose levels. The Nikkei 225 fell 0.1% after analysts took comments from a bank official as a hint of possible interest rate hikes this year.

` business reporters Matt Ott and Elaine Kurtenbach contributed.

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