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Wall St. Drifts Ahead of Earnings, Fed 04/29 09:37
U.S. stocks are drifting Monday as Wall Street readies for a week packed
with potentially market-moving reports.
NEW YORK (AP) -- U.S. stocks are drifting Monday as Wall Street readies for
a week packed with potentially market-moving reports.
The S&P 500 was up 0.3% in early trading, coming off its best week since
November. The Dow Jones Industrial Average was up 111 points, or 0.3%, as of
9:40 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.
This week will see about a third of all the companies in the S&P 500
reporting how much profit they made during the first three months of the year.
That includes such heavyweights as Amazon and Apple. So far reports have
largely been better than expected, with roughly half the S&P 500's reports in,
highlighted last week by Alphabet, Microsoft and others.
Domino's Pizza added to the pile Monday, reporting stronger-than-expected
results thanks to a second straight quarter of rising orders for deliveries and
carryout. Its stock steamed 3.9% higher.
Such solid numbers helped the S&P 500 rally last week to its first winning
week in four. The companies in the index look to be on track to report overall
growth of 3.5% in earnings per share from a year earlier, which would be the
third straight quarter of growth.
The stock market will need such strength to steady it following what's been
a rough April. The S&P 500 fell as much as 5.5% during the month as signals of
stubbornly high inflation forced traders to ratchet back expectations for when
the Federal Reserve could begin easing interest rates.
After coming into the year forecasting six or more cuts to rates this year,
traders are now placing many bets on just one, according to data from CME Group.
When the Federal Reserve announces its latest policy decision on Wednesday,
no one expects it to move its main interest rate, which is sitting at its
highest level since 2001. Instead, the hope is that the central bank could
offer some clues about when the first cut to rates could come.
A large part of the rally to records for U.S. stocks since late October was
built on expectations for coming cuts to interest rates, which relax the
pressure on the economy and typically goose prices for investments. If they
don't arrive, the stock market could feel even more downward pressure.
This week's Fed meeting won't include the publication of forecasts by Fed
officials about where they see rates heading in upcoming years. The last such
summary of forecasts, released in March, showed the typical Fed official at the
time was penciling in three cuts for 2024.
But Fed Chair Jerome Powell could offer more color in his press conference
following the central bank's decision. He may not offer much, though, because a
consequential report will be coming later in the week that could shift policy
makers' outlook even more.
Economists expect Friday's jobs report to show that hiring by U.S. employers
cooled a bit in April and that growth in workers' wages remained relatively
solid.
Wall Street is in an awkward position, where the hope is that the job market
remains strong enough to help the economy avoid a recession but not so strong
that it feeds upward pressure into inflation.
Other potentially market-moving reports this week include the latest monthly
updates on the economy's manufacturing and services sectors, as well as details
from the U.S. Treasury about how much debt it will auction.
In markets abroad, Japan's stock market was closed for a holiday. But the
Japanese yen continues to be at the center of the currency market, as it slides
against the U.S. dollar back to where it was in 1990. The sharp drop for the
yen's value has raised speculation in the market about whether Japanese
officials will make moves to prop it up. The Bank of Japan left its main
interest rate alone on Friday.
In other markets, stock indexes rose across much of Asia while remaining
mixed in Europe.
In the bond market, the yield on the 10-year Treasury slipped to 4.63% from
4.67% late Friday.
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