| |
Financial Markets 10/22 09:33
NEW YORK (AP) -- U.S. stocks are slipping again on Tuesday, and the S&P 500
is on track for its first back-to-back loss in a month and a half as Wall
Street's record-breaking rally loses more momentum.
The S&P 500 was 0.4% lower in morning trading. It also fell modestly on
Monday after coming off a sixth straight winning week, its longest such streak
of the year.
The Dow Jones Industrial Average dipped 175 points, or 0.4%, and likewise
fell further from its all-time high set on Friday. The Nasdaq composite was
0.2% lower, as of 10 a.m. Eastern time.
GE Aerospace was one of the heaviest weights on the stock market after
tumbling 7.2%. The company, which began trading independently this spring after
splitting off from the former conglomerate General Electric, reported stronger
profit for the latest quarter than analysts expected, but its revenue fell
short of forecasts.
Verizon Communications sank 4.6% after it likewise reported weaker revenue
for the latest quarter than expected, even though its profit edged past
forecasts.
Genuine Parts, which sells automotive and industrial replacement parts,
dropped 18.5% for one of the largest losses in the S&P 500 after its profit for
the latest quarter fell well short of expectations. CEO Will Stengel said much
of the shortfall was due to continued weakness in Europe and its industrial
business.
Sherwin-Williams sank 2.8% after both its profit and revenue came in weaker
than analysts expected. CEO Heidi Petz cited a "tough macroeconomic
environment" and "continued choppiness in the demand environment" for its
paints and coatings. Demand from do-it-yourself customers in North America
remains weak given the higher debt levels that they're carrying and
still-lingering inflation.
Helping to keep the market's losses in check was General Motors. It drove
7.6% higher after delivering stronger profit and revenue than expected. It
benefited from stronger sales to individual U.S. customers, even as sales
slowed to large fleet buyers.
Philip Morris International rallied 7.3% after likewise topping forecasts
for both profit and revenue. CEO Jacek Olczak said the company is seeing
momentum across regions and business lines, including growth for both its
smoke-free business and for its combustible cigarettes.
Norfolk Southern rose 3.3% after the railroad topped analysts' forecasts for
profit.
Stocks have generally slowed their record-breaking momentum this week under
increasing pressure from rising Treasury yields in the bond market.
The yield on the 10-year Treasury eased back on Tuesday to 4.18% from 4.20%
late Monday. But it's still well above the 4.08% level it was at just on
Friday. Higher yields for Treasurys can make investors less willing to pay high
prices for stocks, which critics say already look too expensive.
Treasury yields have been climbing following a raft of reports showing the
U.S. economy remains stronger than expected. That's good news for Wall Street,
because it bolsters hopes that the economy can escape from the worst inflation
in generations without the painful recession that many had believed to be
inevitable.
But it also is forcing traders on Wall Street to ratchet back their
expectations for how much the Federal Reserve will cut interest rates. The
central bank has made the drastic shift to lowering interest rates in hopes of
keeping the economy strong, but a more resilient-than-expected economy wouldn't
need as many cuts.
Traders are now largely expecting the Fed to cut its main interest rate by
half a percentage point more through the end of the year, according to data
from CME Group. A month ago, some of those same traders were betting on the
federal funds rate ending the year as much as half a percentage point lower
than that.
In stock markets abroad, European indexes were mixed after German software
giant SAP rose after nudging past profit expectations. In Asia, Japan's Nikkei
225 dropped 1.4%, and South Korea's Kospi fell 1.3%, but indexes were more
resilient in China.
___
AP Business Writers Yuri Kageyama and Matt Ott contributed.
---------
itemid:0323c07ea21f8a000c26b9c7f2a6cb64
|
|
