NEW YORK (AP) — Wall Street finished its 10th winning week of the past 11 with mixed results. The S&P 500 ended Friday up 0.1% and remains within zero.
NEW YORK (AP) — Wall Street finished its 10th winning week of the past 11 with mixed results. After a start to earnings season with mixed results, the S&P 500 ended Friday up 0.1%, with the likes of Delta Air Lines remaining within 0.3% of its all-time high. The Dow fell 0.3%, led by a decline in UnitedHealth Group. The Nasdaq is almost unchanged. Bond yields fell on a report that U.S. wholesale inflation was weaker than expected. This has raised expectations that the US Federal Reserve (Fed) will cut interest rates in the future. Oil prices rose on concerns about possible disruptions to crude oil supplies.
This is the latest news. Previous articles from the Associated Press are below.
NEW YORK (AP) — Stocks were hovering near record highs on a busy Friday on Wall Street as oil prices rose and bond yields fell.
The S&P 500 rose 0.1% in afternoon trading, within 0.2% of its all-time high set two years ago, as Delta Air Lines, JPMorgan Chase & Co. and Wells Fargo & Co. opened the earnings season with mixed results. It was approaching.
As of 2:30 p.m. ET, the Dow Jones Industrial Average was down 100 points, or 0.3%, and the Nasdaq Composite was up 0.1%.
In the bond market, yields fell after reports that wholesale-level inflation in the United States last month was weaker than economists expected. This followed a previous day's report showing consumer-level inflation was higher than expected.
Friday's update reassured Wall Street and boosted confidence that inflation has cooled enough for the Federal Reserve to cut interest rates several times this year. Lower interest rates ease pressure on the economy and financial system, while also boosting investment prices. And US bond yields have already fallen since the fall on expectations for interest rate cuts.
The yield on the 10-year U.S. Treasury note fell to 3.95% from nearly 4% just before the report was released. In October, it exceeded 5%, the highest level since 2007, putting sharp downward pressure on the stock market.
The two-year Treasury yield, which more accurately reflects expectations from the Fed, fell to 4.16% from 4.27% before the headline inflation report was released. Traders have reframed their view that the Federal Reserve will start cutting interest rates in March, according to data from CME Group.
Traders are primarily betting that the Fed will cut key interest rates at least six times by 2024. That would be a much more aggressive course than the Fed itself is suggesting. Fed officials have even warned that they could raise rates further if inflation doesn't trend convincingly toward their 2% goal. The federal funds rate is already at its highest level since 2001.
“The danger of the Fed tweaking is that it could fumble during an economic downturn,'' said Brian Jacobsen, chief economist at Annex Wealth Management. “If they're relying on data, that means they're looking in the rearview mirror. Now they have to shift their gaze forward through the windshield.”
Interest rates are one of the main instruments that determine stock price trends. The other is how much profits companies are making, with analysts expecting the S&P 500 index to post its second straight quarter of growth after slumping under the weight of high inflation.
The reporting season for the end of 2023 unofficially began on Friday with a flood of reports from banks.
Bank of America fell 0.5% after its profit for the first three months of 2023 fell short of analysts' expectations. Wells Fargo fell 3%, roughly in line with analyst expectations, while JPMorgan Chase was nearly flat after reporting weaker-than-expected results.
UnitedHealth Group fell 3.6% despite beating analysts' profit expectations. Medical costs at major healthcare companies are soaring, making investors nervous.
Delta Air Lines fell 8.2% despite reporting stronger earnings and revenue than analysts expected for the final three months of 2023. The company provided an expected range indicating that its full-year earnings could be lower than analysts expected.
Airlines and other travel-related companies were also hit by rising oil prices, which weighed on fuel costs. United Airlines fell 9.9% and Norwegian Cruise Line Holdings fell 4.1%.
Oil prices rose on concerns about potential supply disruptions after Yemen's Houthi rebels declared fierce retaliation for US and British anti-government attacks. Benchmark US crude oil rose 0.9% per barrel. Brent crude, the international standard crude, rose 1.5%.
As a result, energy company stocks rose 0.9% overall, making them the top of the S&P 500. Valero Energy rose 2.2% and Marathon Oil rose 1.9%.
In overseas stock markets, Japan's Nikkei Stock Average rose 1.5%, capping a week of strong gains that had seen it rise to levels not seen since 1990, when the bubble economy began to burst. The index was low in much of the rest of Asia, but high across Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
Stan Cho, Associated Press