The Dow Jones Industrial Average ticked lower as investors sifted through earnings from big banks and other blue chip companies, in the search for fresh indicators on the market while weighing the talk of another interest rate hike.
How stocks are trading
- The Dow DJIA was down 33 points, or 0.1%, at 33,953.
- The S&P 500 SPX,
+0.06%gained 0.2 point to trade at 4,151.
- The Nasdaq Composite COMP,
-0.06%was down 4 points, or less than 0.1%, at 12,153.
All three major indexes rose around 0.3% on Monday.
What’s driving markets
Tuesday is a big day as the market readies for the still young earnings season to kick into high gear. But while stocks pushed higher during premarket trading, the market subsequently stalled and started slipping.
By early afternoon, stocks were trying to regain footing with the S&P just barely in positive territory.
Companies presenting their numbers on Tuesday include Bank of America Corp. BAC,
Results so far have been generally well-received, though declines for Goldman and Johnson & Johnson weighed down the Dow. By midmorning, the three major stock benchmarks were in the red and stocks stayed that way by early afternoon.
While investors gauged earnings results Tuesday morning, Atlanta Fed President Raphael Bostic spoke on CNBC, discussing the need for “one more move” before taking a look to see how the economy is holding up under higher interest rates.
“It was really Bostic’s remarks that pushed us over into the red,” said Kimberly Forrest, founder and chief investment officer at Bokeh Capital Partners.
The premarket earnings generally gave enough for investors to smile about, but the central banker’s comments wiped away the grin. “Bostic is willing to stick it out in for the long haul,” said Forrest.
That view, if it mirrors what others at the Federal Reserve are things, is at odds with market hopes for a retreat from higher interest rates that happens sooner than later, Forrest said.
Meanwhile, Federal Reserve Gov. Michelle Bowman is scheduled to speak at 1 p.m. ET.
Generally upbeat results have helped the S&P 500 to hold near the top of the 3,800 to 4,200 range it has occupied for about five months as softer inflation data of late has also reduced concerns about faster Federal Reserve rate rises.
“The S&P 500 is approaching the highest levels reached in February, as the market focus is shifting back to economic and corporate data,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Stronger-than-expected earnings could give a hand to equity bulls,” she added but warned this could falter if recent signs of U.S. economic resilience pushed yields back higher.
And data out of China on Tuesday suggested an important growth driver of the global economy was improving, with GDP up 4.5% in the first quarter, boosted by increased consumption and retail sales, after authorities abruptly abandoned the stringent “zero-COVID” strategy.
But pessimism remains. Fund managers struck the most downbeat mood so far this year, according to a Bank of America fund manager survey. Growth expectations are softening, even as the polled managers predict global inflation and short-term rates will ebb lower.
Read: The ‘fuel is there to blow the top off’ the stock market. Here’s what’s missing.
In other data beyond corporate earnings, March housing starts showed a 0.8% decline after a revised 7.3% increase in February. U.S. building permits fell 8.8% in the month. The decline was linked to a slowdown in apartment building construction.
Companies in focus
- Bank of America shares were off more than 1% after trading higher in premarket activity. The bank reported a beat on revenue and profit in its first quarter profits.
- Shares of Goldman Sachs were almost 2% lower as investors digest the bank’s results. Goldman’s first quarter revenue missed estimates, but net income beat expectations.
- Johnson & Johnson shares were down more than 2%. The consumer and pharmaceutical booked a multibillion charge to settle talc litigation claims — but the company also beat analyst estimates while lifting its quarterly dividend and raising it full-year guidance.
- Lockheed Martin shares were up more than 2% higher after first quarter earnings results. The defense and aerospace company beat expectations on earnings and sales.