Wall Street drifts in mixed trading as oil recovers some of its losses
Wall Street drifted through a quiet day of mixed trading Tuesday, when most stocks fell but a handful of influential companies kept the losses in check.
The Standard & Poor’s 500 slipped 7.04 points, or 0.1%, to 4,756.50 to follow up its best day in nearly two months. The Dow Jones industrial average fell 157.85 points, or 0.4%, to 37,525.16, and the Nasdaq composite rose 13.94 points, or 0.1%, to 14,857.71.
Eversource Energy tumbled 7.7% for one of the worst losses in the S&P 500 after it said it could take a hit of as much as $1.6 billion against its results for the end of 2023. It’s negotiating the sale of its stake in several offshore wind projects, and it may need to account for a lower value for them due to several challenges.
Unity Software fell 8% after it said it will cut about a quarter of its workforce, or 1,800 positions.
Boeing also fell again, but not as much as on Monday, the first trading day after one of its jets flown by Alaska Airlines suffered an in-flight blowout over Oregon. Its stock lost 1.4% after tumbling 8% on Monday. Spirit AeroSystems, which makes fuselages and other parts for Boeing, slipped 0.4%.
What’s a ‘door plug’ and why do airliners have them? How does a smartphone still work after falling three miles? We have answers to these and other questions stemming from Alaska Flight 1282.
Elsewhere in the airline industry, JetBlue Airways lost 10.2% after its chief executive, Robin Hayes, said he would step down for health reasons. He will be replaced by JetBlue’s current president, Joanna Geraghty, who will become the first woman to lead a major U.S. airline.
On the winning side of Wall Street, Illumina gained 4.5% after the biotechnology company said it expects to report stronger revenue for the end of 2023 than analysts had forecast. Urban Outfitters jumped 7.7% after it said total sales at its stores, including Anthropologie, strengthened by 10% during the final two months of the year from 2022 levels.
Nvidia, meanwhile, rose 1.7% to set an all-time high for a second straight day. It’s been riding a wave of excitement that its chips will stay in huge demand thanks to the boom around artificial intelligence technology. And as one of Wall Street’s largest stocks, its movements carry more weight on the S&P 500 and other indexes than almost any other company.
A 1.5% gain for Amazon, another one of Wall Street’s titans, also helped to limit the losses for the S&P 500, even though 7 out of 10 stocks in the index fell.
Financial markets have had a slow start to the year after roaring into the end of 2023. The S&P 500 had leaped to nine straight winning weeks to close out the year, mostly on rising hope that the U.S. economy will remain resilient and the Federal Reserve will cut interest rates sharply through 2024.
Some mixed data recently have bolstered criticism saying Wall Street may have gotten too optimistic about the number of rate cuts coming.
The Federal Reserve has already raised its main interest rate to the highest level since 2001, hoping to grind down the economy and investment prices to get inflation under control. With inflation down considerably from its peak, the Fed has indicated it may cut rates three times through 2024. That would give investment prices a boost and relax the pressure on the economy and financial system.
But traders are still betting on a better-than-50% probability for at least six cuts, or double the Fed’s projection, according to data from CME Group. Critics say such a high number is unlikely unless the economy falls into a recession.
New data show the increasingly crucial role immigrants play in the economy and the American workforce — especially in California.
Treasury yields have already slid on anticipation of rate cuts, and they were holding relatively steady on Tuesday. The yield on the 10-year Treasury edged up to 4.02%.
In the oil market, crude prices clawed back some of their sharp losses from the day before, when Saudi Arabia made moves hinting at weakening demand. A barrel of benchmark U.S. crude rose $1.47, to $72.24. Brent crude, the international standard, gained $1.47, to $77.59.
This week’s headline events for Wall Street are likely to come toward the end of the week. On Thursday, the U.S. government will give its latest monthly update on inflation at the consumer level. Continued progress there could show whether Wall Street’s hopes for rate cuts are justified or fanciful.
With expectations so strong for deeper cuts to rates than the Fed is suggesting, “incoming inflation data would need to continue to surprise for the Fed to cut as soon as March,” according to economists at Deutsche Bank.
On Friday, big companies in the S&P 500 will begin reporting their results for the final three months of 2023. The broad expectation is for companies in the index to report modest growth in earnings per share from a year earlier.
In stock markets abroad, Japan’s Nikkei 225 rose 1.2% to notch its highest close since 1990. Indexes elsewhere had more modest moves, with many edging lower.
Caltrans says AI can help generate recommendations so workers can take steps to improve the flow of traffic and potentially prevent accidents on the road.
AP writers Elaine Kurtenbach and Matt Ott contributed to this report.
