May 22nd, 2024

Stock market today: Wall Street climbs to trim its loss for the week

By Stan Choe, The Associated Press on May 2, 2024.

NEW YORK (AP) – U.S. stocks closed higher and trimmed their losses for the week. The S&P 500 climbed 0.9% Thursday, a day after swinging sharply when the Federal Reserve said it’s likely delaying cuts to interest rates. The Dow Jones Industrial Average also rose 0.9%, and the Nasdaq composite added 1.5%. Qualcomm, Carvana and other companies helped lead the market after reporting stronger results for the latest quarter than expected. Treasury yields eased in the bond market following reports on joblessness and worker productivity. Friday’s monthly update on the U.S. job market will likely be more impactful.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) – U.S. stocks are rising Thursday to trim their losses for the week.

The S&P 500 was 0.9% higher in late trading, a day after swinging sharply when the Federal Reserve said it’s likely delaying cuts to interest rates but not planning to hike them. It more than halved its drop for the week following the Fed’s announcement, which was largely seen as less harsh than feared.

The Dow Jones Industrial Average was up 334 points, or 0.9%, with a little less than an hour remaining in trading, and the Nasdaq composite was 1.5% higher.

In the bond market, Treasury yields were easing ahead of a report on Friday from the U.S. government on how many jobs employers added last month. It’s one of the most highly anticipated economic reports each month, and economists expect it to show a slowdown in hiring.

“The markets will be hungry for any data suggesting the economy isn’t heating up any more than it did in” the first three months of 2024, according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. That would give the Fed more leeway to consider cutting rates.

Earnings reports from several big companies helped drive the market higher. Qualcomm rose 10.1% after topping forecasts for profit and revenue in the latest quarter. The tech company also gave forecasted ranges for upcoming revenue and profit whose midpoints topped analysts’ expectations.

Carvana revved 32.5% higher after the used-car seller reported much better results for the latest quarter than analysts expected, boosted by better-than-forecast sales.

MGM Resorts International rose 2.9% after likewise topping forecasts for profit and revenue. It credited stronger traffic at MGM China, which ramped up as COVID-19 restrictions fell away in Macau.

Apple climbed 2.9% ahead of its profit report, scheduled to arrive after trading ends Thursday. It’s the latest to report among the group of stocks known as the “Magnificent Seven,” which drove the majority of the market’s gains last year.

They helped to offset a 16.4% drop for Etsy, which only roughly matched analysts’ expectations for results and revenue. It cited a “still challenging” environment where customers broadly are more selective about the non-essentials they’re buying.

DoorDash sank 10.6% after reporting a worse loss than expected. The company, which has been spending more on personnel and research and development, also gave a forecasted range for underlying earning trends in the current quarter whose midpoint fell short of analysts’ expectations.

Peloton Interactive swung from an early gain to a loss of 7.5% after it said it would cut roughly 400 jobs as part of a program to save $200 million in costs annually. It also said its CEO, Barry McCarthy, is stepping down. The company’s stock had fallen to a record low last week.

Linde was one of the heaviest weights on the S&P 500, sinking 4.9%, despite reporting stronger results for the latest quarter than expected. Revenue for the industrial gases and engineering company fell short of Wall Street’s expectations, as did the midpoint of its forecasted range for earnings in the current quarter.

In the bond market, which has been helping to dictate much of the stock market’s movements recently, yields were easing following some economic reports.

One showed that fewer U.S. workers applied for unemployment benefits last week than economists expected. It’s the latest signal that the job market remains solid despite high interest rates.

A separate, potentially more disappointing report suggested growth in how much U.S. workers produced per hour worked was weaker at the start of 2024 than economists expected. A measure comparing labor costs to productivity, meanwhile, rose by more than expected in the preliminary report. That could put upward pressure on inflation, which is one of the biggest fears on Wall Street.

The economy is in a tight spot, where the hope is that it remains strong enough to stay out of a recession but not so strong that it worsens the already stalled progress on inflation.

Stubbornly high readings on inflation this year are what pushed Federal Reserve Chair Jerome Powell to say on Wednesday that it will likely take “longer than previously expected” to get enough confidence inflation is under control before it can cut interest rates.

The Fed’s main interest rate has been sitting at its highest level since 2001, and cuts would release some pressure on the economy and financial markets.

After coming into the year forecasting six or more cuts to rates in 2024, traders are now largely betting on just one or two, if any, according to data from CME Group.

The yield on the 10-year Treasury fell to 4.57% from 4.63% late Wednesday. The two-year yield, which moves more closely with expectations for the Fed, fell to 4.88% from 4.97%.

In stock markets abroad, indexes were mixed across Asia and Europe. Hong Kong’s Hang Seng jumped 2.5%, while other markets in China were closed for a holiday.

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AP writers Matt Ott and Zimo Zhong contributed.

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