Stock market today: Wall Street drifts near records as earnings reporting season heats up

NEW YORK (AP) — Wall Street is hanging around its record heights Tuesday as earnings reporting season for big U.S. companies gets going.

The S&P 500 was virtually unchanged in early trading. The Dow Jones Industrial Average was down 67 points, or 0.2%, a day after topping 38,000 for the first time. The Nasdaq composite was 0.1% lower as of 9:35 a.m. Eastern time.

Procter & Gamble climbed 5.6% after the company behind Charmin and Olay posted stronger profit for the latest quarter than analysts expected. It benefited from price hikes for is products, and it raised its forecast for profit for this full fiscal year.

United Airlines flew 9.3% higher after it also reported stronger profit for the last three months of 2023 than analysts expected. It made more in revenue from customers in both basic economy and premium seats, though it warned it may lose money in the first three months of this year because of the grounding of its Boeing 737 Max 9 planes.

They helped offset an 8.8% tumble for 3M. The maker of Post-it notes and Command strips reported stronger-than-expected profit for the end of 2023, but it also gave a forecast for earnings this year that fell short of analysts’ expectations.

Earnings season is kicking into gear, and more than a dozen companies in the S&P 500 reported their latest quarterly results Tuesday morning. More than 50 are scheduled to follow up later this week, including Tesla and Intel.

Among Tuesday’s headliners were Johnson & Johnson, which fell 2.4% after reporting weaker profit than expected. Verizon Communications rose 4.3% after beating analysts’ profit estimates. General Electric also topped expectations, but its stock sank 2.5% after it gave a forecast for profit this quarter that fell short of analysts’ forecasts.

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

Stocks have nevertheless rallied to records, and the S&P 500 returned to an all-time high last week for the first time in two years. Much of that is because of expectations for the Federal Reserve to cut interest rates several times this year.

Such cuts can boost prices for investments while relaxing the pressure on the economy and financial system. The Federal Reserve itself has said it may cut rates three times this year as inflation cools, which would allow the central bank to loosen its leash on the economy.

Treasury yields have already eased significantly since the autumn on expectations for coming rate cuts, though critics warn Wall Street may have gone overboard again in forecasting how many cuts will come and how soon the Fed will begin.

Yields were mixed in the bond market Tuesday. The yield on the 10-year Treasury rose to 4.13% from 4.11% late Monday, though it remains well below its 5% level during October.

In stock markets abroad, Hong Kong’s Hang Seng jumped 2.6% to recover some of its sharp losses for the year so far on hopes that Chinese authorities may make moves to shore up markets there. The Hang Seng is still down nearly 10% so far in the young year on worries about a weak recovery for the world’s second-largest economy.

In Japan, one of the world’s best performers for the year so far slipped even though the Bank of Japan kept its interest-rate policies at ultra-easy levels. The Nikkei 225 dipped 0.1% after analysts took comments by a bank official as hints that hikes to rates may be coming this year.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.