New York Stock Market Mixed Amid Corporate Earnings Reports... Dow Down 0.3%

The New York stock market showed mixed trends as major companies began releasing their fourth-quarter earnings reports for last year.

New York Stock Exchange, USA. Photo by Yonhap News

On the 12th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,592.98, down 0.31% (118.04 points) from the previous trading day.

The Standard & Poor's (S&P) 500 index rose 0.08% (3.59 points) to close at 4,783.83, while the Nasdaq index increased by 0.02% (2.57 points) to finish at 14,972.76.

Among the 11 sectors within the S&P 500, consumer discretionary, healthcare, and financial stocks declined, whereas energy, real estate, communication, utilities, and technology stocks rose.

Investors closely watched corporate earnings and wholesale price indicators ahead of the long holiday weekend extending from the weekend through next Monday (Martin Luther King Jr. Day).

JP Morgan Chase, the largest bank in the U.S., reported net income and operating revenue exceeding market expectations, yet its stock price fell by 0.7%.

Citigroup experienced a significant increase in losses due to adjustments in overseas market operations, but its adjusted earnings per share excluding one-time items surpassed expectations, leading to a roughly 1% rise in its stock price. The company announced plans to cut 10% of its total workforce.

Bank of America’s adjusted net income beat expectations, but its operating revenue fell short, causing its stock price to drop more than 1%.

Delta Air Lines’ stock fell about 9% after lowering its profit guidance for the year despite reporting net income and revenue that exceeded expectations. The downward revision in Delta’s profit guidance dragged airline stocks down together.

American Airlines and United Airlines saw their stock prices fall by more than 9% and 10%, respectively, while JetBlue and Alaska Airlines stocks declined by over 5% and 4%, respectively.

Tesla’s stock dropped more than 3% following news of price cuts on some models in China. BlackRock rose 0.8% on news of its acquisition of Global Infrastructure Partners and better-than-expected net income. UnitedHealth’s stock fell over 3% due to disappointment over its quarterly earnings.

The wholesale price index released that day showed a decline, easing concerns about inflation. The U.S. Producer Price Index (PPI) for December, seasonally adjusted, fell 0.1% month-over-month. This was below the 0.1% increase forecasted by experts surveyed by The Wall Street Journal (WSJ), marking the third consecutive month of decline in wholesale prices.

A continued decline in wholesale prices suggests that the Consumer Price Index (CPI), which is passed on to consumers, will also trend downward. This indicator came after the December CPI released the previous day showed stronger-than-expected results.

With the possibility of a Federal Reserve rate cut in March increasing again, the 2-year Treasury yield, which is sensitive to Fed monetary policy, traded down about 10 basis points to 4.16%. The 10-year yield fell about 2 basis points to 3.94%.

Strategists at BMO Capital said in a report that upcoming speeches by Federal Reserve officials scheduled for next week could reduce expectations for a rate cut in March.

According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability of the Fed cutting rates in March at the close of trading was 79.5%. The chance of a 0.25 percentage point cut was 74.2%, while the chance of a 0.50 percentage point cut was 5.2%.

Meanwhile, the financial markets will be closed on the 15th in observance of Martin Luther King Jr. Day.