Wall Street barely budged again Wednesday after another set of mixed earnings reports from big U.S. companies.
The S&P 500 inched down by 0.35 points, or less than 0.1%, to 4,154.42. The Dow Jones Industrial Average slipped 79.62 points, or 0.2%, to 33,897.01, and the Nasdaq composite edged up by 3.82 points, or less than 0.1%, to 12,157.23.
Tesla weighed heavily on the market after the electric vehicle company cut prices for its two top-selling models, its fourth U.S. price cut this year. That is expected to be a signal Tesla is trying to spur sales amid shifting U.S. tax credits for EVs. Shares of Tesla Inc. fell 2% before releasing its latest earnings report after trading closed.
Shares of Netflix Inc. slumped 3.2% after reporting weaker revenue for the latest quarter than analysts expected, though its profit topped forecasts.
Elevance Health Inc. dropped 5.3% despite reporting stronger profit and revenue than expected. The health insurer gave a forecast for earnings this year that fell short of some analysts’ expectations.
So far, most companies this reporting season have been beating profit forecasts to clear a bar that was set particularly low. Analysts had forecast the sharpest drop in S&P 500 earnings since the pandemic torpedoed the global economy in 2020. Profits are under pressure because inflation is high, interest rates are much higher than a year ago and portions of the economy are slowing.
“That’s part of the reason why the market has been kind of directionless,” Megan Horneman, chief investment officer at Verdence Capital Advisors, said of recent trading. “We got mixed earnings, but not as bad as people expected.”
Shares of Intuitive Surgical Inc. leaped 10.9% for one of the biggest gains in the S&P 500 after delivering stronger profit and revenue for the latest quarter than expected.
Shares of Abbott Laboratories rose 7.8%, Nasdaq Inc. gained 3.1% and United Airlines Holdings Inc. flew 7.5% higher after their profits also topped Wall Street’s expectations.
A particular focus has been on the health of banks after the higher interest rates helped lead last month to the second- and third-largest U.S. bank failures in history.
The industry’s behemoths have largely reported better results than expected, with several saying they benefited from the industry’s turmoil as customers moved deposits to them and away from smaller banks that seemed at greater risk.
Western Alliance Bancorp., a Phoenix-based bank whose stock plunged nearly 64% over a five-day stretch last month, surged after the company said deposits stabilized and have been rising in recent weeks. Its stock jumped 24.1%.
Western Alliance helped lead the majority of financial stocks higher.
Synchrony Financial stock rose 1.8% after the company reported better revenue than expected but weaker profit. Morgan Stanley stock rose 0.7% after the company topped forecasts for profit and revenue.
In the bond market, yields climbed after a report showed U.K. inflation remained greater than 10% for a seventh straight month.
Central banks around the world have been raising rates at a furious pace for more than a year, and the wide expectation is for the Federal Reserve to raise short-term U.S. rates again at its meeting next month. High rates can stifle inflation, but only by slowing the entire economy, raising the risk of a recession and hurting prices for investments.
The yield on the 10-year Treasury rose to 3.59% from 3.58% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.25% from 4.20%.
Information for this article was contributed by Yuri Kageyama and Matt Ott of The Associated Press.