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NEW YORK (AP) — Wall Street ended its 10th winning week out of the past 11 on Friday with mixed results, following an encouraging report on inflation.
The S&P 500 rose 0.1% after mixed results were released as earnings season began. delta airlines, JPMorgan Chase, etc. The Dow Jones Industrial Average fell 118 points, or 0.3%, due to the sharp drop in UnitedHealth Group following the earnings report. The Nasdaq was almost flat, gaining less than 0.1%.
Stocks have been climbing towards records in recent months, with the S&P 500 index within 0.3% of its all-time high on hopes that inflation has cooled enough for the Federal Reserve to cut interest rates several times this year. is approaching.
In the bond market, U.S. Treasury yields had already fallen in response to these expectations, and they fell further after a report. U.S. wholesale-level inflation was weak Last month’s sales exceeded economists’ expectations. The data reinforced hopes for a rate cut, a day after separate reports said consumer-level inflation was higher than expected.
The yield on the 10-year U.S. Treasury note fell to 3.94% from nearly 4% just before the report was released. In October, it exceeded 5%, the highest level since 2007. Easing interest rates and yields eases pressure on the economy and financial system, while increasing investment prices.
The two-year Treasury yield, which more accurately reflects expectations from the Fed, fell to 4.17% 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 its key interest rate more than six times by 2024. That would be a much more aggressive course than the Fed itself is suggesting. It has even warned that it could raise rates further if inflation does not trend convincingly toward its 2% target. 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 number of reports released. report from bank.
JPMorgan Chase & Co. fell 0.7% after reporting weaker-than-expected results for the final three months of 2023.
UnitedHealth Group fell 3.4% despite beating analysts’ profit expectations. Medical costs at major healthcare companies are soaring, making investors nervous.
Delta Air Lines fell 9% despite reporting stronger earnings and revenue than analysts expected for the final three months of 2023. The company’s future full-year profit forecast range may be lower than analysts’ expectations.
Airlines and other travel-related companies were also hit by rising oil prices, which weighed on fuel costs. United Airlines fell 10.6% and Norwegian Cruise Line Holdings fell 4.3%.
Oil prices rise on concerns Possible supply disruption after Yemen’s Houthi rebels vowed fierce retaliation against US and UK attacks. Benchmark U.S. crude oil rose 66 cents to $72.68 a barrel. Brent crude oil, the international standard, rose 88 cents to $78.29 per barrel.
As a result, energy company stocks rose 1.3% overall, making them the top of the S&P 500 index. Valero Energy rose 2.8% and Marathon Oil rose 2%.
Overall, the S&P 500 rose 3.59 points to 4,783.83. The Dow Jones Industrial Average fell 118.04 points to $37,592.98, and the Nasdaq Composite rose $2.57 to $14,972.76.
Overseas stock markets capped off a strong week with Japan’s Nikkei Stock Average rising 1.5%, the highest level since 1990, when the bubble economy began to burst. The index was low in much of the rest of Asia, but high in Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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