US STOCKS-S&P 500 closes up; focus on earnings and US interest rates

Rambus

06/02/2024 21:00

(Updates prices at 04:00 p.m. ET/ 2100 GMT)
    By Sinéad Carew and Johann M  Cherian
       Feb 6 (Reuters) - 
    The S&P 500 closed slightly higher on Tuesday, as investors
scrutinized a mixed bag of earnings at big U.S. companies and
digested comments from Federal Reserve policy makers for clues
about its first planned interest-rate cut.
    Minneapolis Fed President Neel Kashkari said the central
bank is "not done yet" with inflation although he noted it had
come down quickly with three-month and six-month inflation data
"basically" at the Fed's 2% goal. 
        Also, Cleveland Fed President Loretta Mester said that
if the U.S. economy performs as she expects this could open the
door to rate cuts. But Mester said she was not ready yet to
suggest timing for easier policy due to inflation uncertainty.
     On Sunday, Fed Chair Jerome Powell dashed any remaining
hopes for a March rate cut. He had said the Fed can be "prudent"
in deciding when to cut with a strong economy allowing time to
build confidence that inflation is under control.  
    "The big macro news today is a couple of Fed governors
confirming what Powell said over the weekend. It's putting a
little damper on markets today. It's a little follow through
from yesterday," said Peter Tuz, president of Chase Investment
Counsel in Charlottesville, Virginia. 
        According to preliminary data, the S&P 500
 .SPX  gained 11.33 points, or 0.23%, to end at 4,954.14 points,
while the Nasdaq Composite  .IXIC  gained 12.16 points, or
0.07%, to 15,609.49. The Dow Jones Industrial Average
 .DJI  rose 138.20 points, or 0.36%, to 38,520.70.
  
        John Praveen, Managing Director & Co-CIO at Paleo Leon
suggested the Fed should not wait too long to ease policy as
troubles at regional Bank NY Community Bancorp  NYCB.K  are
spotlighting weakness in the rate-sensitive commercial real
estate sector. 
  
        Powell also referred to the sector on Sunday. On
Tuesday, U.S. Treasury Secretary 
    Janet Yellen
     said she was concerned about commercial real estate
stresses on banks and property owners, yet she believes the
situation is manageable with assistance from bank regulators.
        Praveen saw the comments adding to investor jitters.
  
        The KBW Regional Banking index  .KRX  fell again after
losing around 11% in the previous five sessions and New York
Community Bancorp  NYCB.N  shares 
    stretched a selloff
     since the lender's surprise quarterly loss last week.
  
        
    Airlines
     helped advance the Dow Jones Transport Average  .DJT  with
some signs of strong demand. Frontier Group Holdings'  ULCC.O 
rallied after it surprised investors with a  break-even
financial report. 
  
    With over half of S&P 500 companies now having reported
earnings, 81.2% surpassed expectations, according to LSEG data.
Overall S&P 500 earnings are expected to have risen 8.1% in the
fourth quarter from the year-ago quarter.
    GE HealthCare Technologies  GEHC.O  rose sharply after the
medtech firm posted better-than-expected fourth-quarter
earnings, driving the S&P 500 healthcare sector  .SPXHC  to an
all-time high.
    The materials index  .SPLRCM  gained ground with shares in
chemicals firm DuPont de Nemours  DD.N  jumping after it beat
fourth-quarter profit estimates, announcing a $1 billion
share-repurchase program and hiking its dividend. 
        Palantir Technologies  PLTR.N  shares also soared after
forecasting upbeat annual profit. 
    However, Eli Lilly  LLY.N  reversed earlier gains even after
forecasting 2024 profit above estimates.
    Chip stocks pressured the tech-heavy Nasdaq. The
Philadelphia SE Semiconductor index  .SOX  underperformed during
the session. Rambus Inc  RMBS.O  led declines in the sector as
its shares plunged after its quarterly report.

 (Reporting by Sinéad Carew in New York, Johann M Cherian and
Ankika Biswas in Bengaluru; Editing by Pooja Desai and David
Gregorio)
 ((sinead.carew@thomsonreuters.com; +13322191897;))