Stock Market Today: Flood of earnings reports leaves Wall Street feeling mixed as small stocks continue to rally

STAN CHOE, Associated Press

8 minutes ago

FILEThe New York Stock Exchange is seen on May 16, 2024, in New York. (AP Photo/Peter Morgan, File)

NEW YORK (AP) — U.S. stocks were steady on a quiet day on Wall Street as earnings season for big companies got underway. The S&P 500 fell 0.2% Tuesday. The Dow Jones Industrial Average fell 0.1% and the Nasdaq Composite fell slightly, 0.1%. The smaller stocks in the Russell 2000 continued their big run, rising 1%. They recently pivoted to market leadership and rose on hopes of coming interest rate cuts. Dozens of companies are reporting spring results, headlined by Alphabet and Tesla after trading closed. Expectations are high.

THIS IS A BREAKING NEWS UPDATE. Below is the earlier AP story.

NEW YORK (AP) — U.S. stock indexes on Wall Street rose slightly Tuesday afternoon as the earnings reporting season gets underway for major companies.

The S&P 500 rose 0.1% after earlier floundering between small gains and losses. Stocks in the benchmark index were about evenly split between winners and losers. The Dow Jones Industrial Average rose 58 points, or 0.1%, at 2:41 p.m. Eastern time, and the Nasdaq Composite rose 0.1%.

Dozens of companies report spring earnings results on Tuesday, with a pair of highly influential Big Tech companies following Alphabet and Tesla. Expectations are generally high, with analysts predicting the strongest earnings growth for S&P 500 companies since late 2021, according to FactSet.

GE Aerospace rose 6.6% after beating analysts’ earnings estimates in the spring and raising its full-year profit forecast, one of the strongest forces lifting the S&P 500.

Danaher rose 6% after also reporting higher profit and revenue for its latest quarter than analysts had expected, partly due to the strength of its Cepheid molecular testing business.

Sherwin-Williams climbed 7 percent after also reporting stronger-than-expected profit. The company said it is seeing growth in paint demand from new residential customers and expects that momentum to continue throughout the year.

Through its customers, the paint and coatings company has felt the pain of high interest rates meant to control inflation. High mortgage rates, for example, have cooled the housing market, and a report Tuesday showed that sales of previously occupied homes fell more sharply in June than economists had expected. Sales slowed in part because prices for previously occupied homes are at their highest level ever, according to the National Association of Realtors.

Easier times may be ahead for interest rates. With inflation slowing, the consensus on Wall Street is that the Federal Reserve will begin cutting key interest rates in September. That would provide some relief for both the economy and financial markets after the Fed kept the federal funds rate at its highest level in more than two decades.

Treasury yields have been falling since the spring on such expectations, and they edged lower again Tuesday. The yield on the 10-year Treasury fell to 4.24% from 4.25% Monday night.

Hopes of coming rate cuts have helped smaller stocks in particular rally. They stand to benefit more from lower interest rates than their larger rivals, and the Russell 2000 of smaller stocks rose a market-leading 1 percent. It’s a turnaround after smaller companies had lagged the largest stocks, led by a small group known as the “Magnificent Seven.”

Analysts see it as an encouraging sign that more stocks are participating in a rising market, and not just a few dominant elites.

On the losing side of Wall Street, UPS fell 13.4% after reporting weaker spring earnings and revenue than analysts had expected. But CEO Carol Tome said the company’s U.S. unit delivered more packages than a year earlier, the first such growth in nine quarters, and called it a “significant turning point for our business.”

Comcast fell 2.3% after reporting spring earnings that fell short of expectations. The biggest declines came from lower attendance at its U.S. theme parks and from its studio business, which failed to deliver big hits like last year’s “The Super Mario Bros.” and “Fast X.”

On foreign stock exchanges, the indices in Asia and Europe showed a mixed picture.

Chinese markets were among the weakest, with stocks down 0.9% in Hong Kong and 1.6% in Shanghai. Analysts described the People’s Bank of China’s central bank’s moves on Monday to cut two key interest rates as uninspiring.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.