US close: Stocks edge higher as investors digest earnings, Fed comments
US stocks were trading within a tight range on Tuesday but finished with minor gains, bouncing back after Fed-induced losses the previous session as bond yields surged.
With no major economic data due on Tuesday, market chatter was dominated by comments from Federal Reserve policymakers, who are doing their best to temper expectations of an imminent interest-rate cut. Meanwhile, a barrage of corporate earnings was keeping investors busy, with well-received results from DuPont, Palantir and Spotify.
The Dow closed up 0.37%, the S&P 500 rose 0.23% while the Nasdaq gained just 0.07%, with very little separating the day's highs and lows as investor risk appetite remained modest.
Bond yields were pulling back, with the 10-year US Treasury yield down 6.6 basis points at 4.095%, after gaining 14 basis points on Monday following comments from Fed chair Jerome Powell who said the central bank was in no rush to cut interest rates. Powell said that the "economy's in a good place" after resilient economic data over the past few months, but the Fed needs more confidence before taking any action.
Several Fed members echoed the same sentiment on Tuesday, with Minneapolis Fed president Neel Kashkari saying "we are not quite there yet", and Cleveland Fed president Loretta Mester claiming there is "no need to rush" to loosen monetary policy.
In a speech in Ohio on Tuesday, Mester said: "It would be a mistake to move rates down too soon or too quickly without sufficient evidence that inflation was on a sustainable and timely path back to 2%."
As markets continue look for more clarity from the Fed on the timing of potential rate cuts, Mester said she didn't want to offer a projection of when the first move might come; instead vaguely suggesting that a cut could come sometime "later this year".
"According to the CME’s FedWatch Tool, the May Fed meeting is now the favoured time for the first cut, although June seems more reasonable based on the Fed’s comments," said David Morrison, senior market analyst at TradeNation. "In addition, the market is now pricing in rate cuts of between 100-125 basis points this year, down from 150 last week. Equities are still rising, based on the positive economic environment."
DuPont and Palantir jump
Shares in chemicals giant DuPont rose over 7% after the parent company of brands including Kevlar, Tyvek and Styrofoam beat market expectations on profits and raised its dividend. Adjusted earnings per share for the fourth quarter stood at 87 cents, above the FactSet consensus forecast for 85 cents, while the dividend was lifted 5.6% to 38 cents.
Data analytics provider Palantir surged 31% after reporting that fourth-quarter revenues rose by a fifth to beat market consensus, citing strong demand for its AI product offerings.
Spotify was also performing well after the music streaming provider reported a 15% jump in paid premium subscribers despite the group's price increases in the fourth quarter.
Also impressing the market with their results were Willis Towers Watson, Check Point Software Technologies, GE HealthCare Technologies and Coherent.
Dow Jones - Risers
Walgreens Boots Alliance, Inc. (WBA) $23.05 3.99%
Nike Inc. (NKE) $102.36 2.68%
Walt Disney Co. (DIS) $99.10 2.53%
Dow Chemical Co. (DOW) $53.99 1.55%
Johnson & Johnson (JNJ) $157.77 1.26%
Unitedhealth Group Inc. (UNH) $509.01 1.20%
3M Co. (MMM) $93.69 1.04%
Boeing Co. (BA) $208.50 0.90%
Cisco Systems Inc. (CSCO) $49.87 0.72%
Walmart Inc. (WMT) $169.79 0.67%
Dow Jones - Fallers
Amgen Inc. (AMGN) $316.14 -1.81%
Salesforce.Com Inc. (CRM) $284.98 -1.08%
Verizon Communications Inc. (VZ) $41.06 -0.78%
McDonald's Corp. (MCD) $283.94 -0.71%
Intel Corp. (INTC) $42.49 -0.67%
American Express Co. (AXP) $205.03 -0.44%
Microsoft Corp. (MSFT) $403.93 -0.42%
Coca-Cola Co. (KO) $59.88 -0.27%
JP Morgan Chase & Co. (JPM) $174.22 -0.16%
International Business Machines Corporation (CDI) (IBM) $183.18 -0.13%
S&P 500 - Risers
Nektar Therapeutics (NKTR) $0.67 19.11%
Willis Towers Watson Public Limited Company (WTW) $268.71 7.29%
CenturyLink Inc. (LUMN) $1.37 5.81%
Kohls Corp. (KSS) $26.82 4.97%
Macerich Co (MAC) $16.47 4.67%
Align Technology Inc. (ALGN) $288.36 4.64%
United Parcel Service Inc. (UPS) $145.42 4.56%
American Airlines Group (AAL) $14.90 4.45%
Simon Property Group Inc. (SPG) $142.77 4.37%
Albemarle Corp. (ALB) $113.10 4.02%
S&P 500 - Fallers
FMC Corp. (FMC) $54.17 -10.34%
Charter Communications Inc. (CHTR) $289.20 -4.76%
Advanced Micro Devices Inc. (AMD) $166.88 -4.22%
Adobe Systems Inc. (ADBE) $605.62 -3.95%
Micron Technology Inc. (MU) $83.76 -3.70%
Tyson Foods Inc. (TSN) $55.44 -3.58%
Arista Networks Inc. (ANET) $263.73 -3.39%
Synopsys Inc. (SNPS) $540.50 -3.33%
Lamb Weston Holdings, Inc. (LW) $101.07 -2.94%
Keycorp (KEY) $13.81 -2.92%
Nasdaq 100 - Risers
JD.com, Inc. (JD) $24.01 7.26%
NetEase Inc. Ads (NTES) $107.23 6.52%
Trip.com Group Limited (TCOM) $39.44 5.44%
Qurate Retail Inc. (QRTEA) $0.84 5.32%
Align Technology Inc. (ALGN) $288.36 4.64%
American Airlines Group (AAL) $14.90 4.45%
Walgreens Boots Alliance, Inc. (WBA) $23.05 3.99%
Baidu Inc. (BIDU) $107.21 3.47%
Paypal Holdings Inc (PYPL) $63.43 3.08%
Starbucks Corp. (SBUX) $95.29 3.01%
Nasdaq 100 - Fallers
Charter Communications Inc. (CHTR) $289.20 -4.76%
Adobe Systems Inc. (ADBE) $605.62 -3.95%
Mercadolibre Inc. (MELI) $1,706.09 -3.87%
Micron Technology Inc. (MU) $83.76 -3.70%
Synopsys Inc. (SNPS) $540.50 -3.33%
Vertex Pharmaceuticals Inc. (VRTX) $416.45 -2.90%
Microchip Technology Inc. (MCHP) $83.08 -2.78%
Gen Digital Inc. (GEN) $20.57 -2.47%
KLA-Tencor Corp. (KLAC) $599.79 -2.45%
Lam Research Corp. (LRCX) $831.82 -2.29%