Stocks waver on Wall Street following a dismal January
Stocks wavered in afternoon trading on Wall Street Tuesday as the market comes off its worst month since early in the pandemic nearly two years ago
NEW YORK — Stocks wavered in afternoon trading on Wall Street Tuesday as the market comes off its worst month since early in the pandemic nearly two years ago.
The S&P 500 was up less than 0.1% as of 2:44 p.m. Eastern. The Dow Jones Industrial Average rose 61 points, or 0.2%, to 35,196 and the Nasdaq was down 0.1% after shedding an early gain.
Technology stocks were among the biggest weights on the market. The sector has been particularly sensitive to concerns about rising interest rates this year. Higher interest rates tend to make pricey growth stocks, like big tech companies, less attractive for investors. Microsoft fell 1.6%.
Health care stocks and companies that make home goods and personal products also fell. UnitedHealth Group fell 1.8% and Procter & Gamble shed 0.7%.
Energy stocks made solid gains, led by a 6.3% rise from Exxon Mobil after the company reported a surprisingly good profit in its fourth quarter as demand for oil continues to improve.
Banks also gained ground as bond yields rose. The yield on the 10-year Treasury, which is used to set rates on home mortgages and many other kinds of loans, rose to 1.80% from 1.77% late Monday. Bank of America rose 1.4%.
Stocks have been in slump so far this year as investors get hit with a long list of threats to economic growth and the markets.
The virus pandemic is still a lingering threat and each new variant could bring a surge of cases that threatens businesses and consumer activity.
The economic recovery is being threatened by persistently rising inflation that has raised costs for businesses and consumers. The big fear is that higher prices being passed off to consumers will eventually curtail spending and crimp economic growth.
The Federal Reserve is shifting monetary policy and plans on raising interest rates to fight rising inflation, which will affect investments and stock prices. Ultra-low rates and other stimulus helped markets recover from the initial shock of the coronavirus pandemic, and then supported stunning gains. Investors expect the Fed to start raising interest rates in March, but there is much uncertainty about how how sharply and how quickly the Fed will move throughout the year.
Investors have mostly priced in a tighter Fed policy and the central bank will likely be reasonable in its pace moving forward, said Jay Hatfield, CEO of Infrastructure Capital Advisors.
“The macro has been priced in and now we’re back to the reality of earnings, which should be constructive,” he said.
Investors are reviewing the latest round of earnings, in part to to see how inflation, the virus pandemic and other factors are impacting businesses and their operations moving forward.
UPS surged 13.5% after the package delivery service reported far better results than analysts were expecting. Rival FedEx rose 2.6%.
Several big companies are on deck for earnings. Google’s parent, Alphabet, will report financial results along with General Motors and Starbucks after the market closes Tuesday.
Facebook’s parent, Meta Platforms, will report results on Wednesday, while Amazon and Ford will report their results on Thursday.
Investors are also looking forward to the Labor Department’s employment report for January, which will be released on Friday.
