NEW YORK (AP) — U.S. stocks are drifting Wednesday, as Wall Street’s big week so far lets off the accelerator.
The S&P 500 was 0.1% lower in midday trading. Its two-day winning streak to start the week erased nearly two thirds of last week’s steep loss.
The Dow Jones Industrial Average was down 100 points, or 0.3%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.3% higher.
Tesla soared 11.7% after saying the night before that it would accelerate production of new, more affordable vehicles, which investors have been hoping will kickstart growth. The announcement helped investors look past the 55% drop in profit that Tesla reported.
Tesla is the first of the group of stocks known as the “Magnificent Seven” to report its results for the start of 2024. The focus is on the small group of stocks because they drove most of the U.S. stock market’s gain last year, and they’ll need to perform to justify their high prices.
Currency traders work near the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange dealing room in Seoul, South Korea, Wednesday, April 24, 2024. (AP Photo/Lee Jin-man)
Photo: ASSOCIATED PRESS/Lee Jin-man
Companies broadly will likely need to deliver fatter profits if they want their stock prices to rise. That’s because they’re unlikely to get much help from the other lever that can lift stock prices: interest rates.
Treasury yields were higher in the bond market, raising the pressure on stocks, following the latest report on the U.S. economy to come in hotter than forecast. A string of recent such reports has diminished hopes that the Federal Reserve may deliver the three cuts to interest rates this year that it had earlier signaled.
Wednesday’s report said that orders for machinery, airplanes and other long-lasting manufactured goods were stronger last month than expected. Wall Street is in an awkward place where it wants the economy to avoid a painful recession, but not to be so hot that it keeps upward pressure on inflation and convinces the Fed not to cut rates.
The yield on the 10-year Treasury rose to 4.65% from 4.60% late Tuesday.
On Wall Street, railroad operator Norfolk Southern fell 3% after reporting weaker results for the latest quarter than forecast.
Bunge Global fell 3.9% after the oilseed processor reported better profit for the latest quarter than expected but warned it has “limited visibility” about how the business will perform into the back half of the year.
Teledyne Technologies tumbled 11.1% for one of the market’s largest losses after the seller of digital imaging sensors, cameras and other equipment reported weaker profit and revenue than forecast. It said demand from the industrial automation as well as test and measurement markets was weaker than it expected.
On the winning side of the market, Hasbro jumped 12% after the toy and game company reported better profit and revenue for the latest quarter than analysts expected. It benefited from growth delivered by its Baldur Gate 3 and Magic: The Gathering games, as well as by its Peppa Pig content.
Rival Mattel rose 5.1% after the company behind Barbie and Hot Wheels reported a milder loss for the latest quarter than analysts expected.
Boeing added 0.8% after reporting results that weren’t as bad as analysts feared. The company, which is battling criticism about the safety of its airplanes, said it’s taking steps to improve its manufacturing quality, which has slowed down production.
In stock markets abroad, Japan’s Nikkei 225 jumped 2.4% as the value of the Japanese yen keeps falling against the U.S. dollar. The yen has been trading at its lowest level in 34 years, which gives a boost to Japanese exporters but also raises speculation about whether Japanese officials will make moves to strengthen their currency.
Stock indexes rose across much of the rest of Asia and Europe.
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AP Writers Matt Ott and Zimo Zhong contributed.
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