U.S. stock indexes were edging higher on Wednesday with bond markets calmer and investors eying more corporate-earnings reports ahead of another slate of Federal Reserve speakers.
How stock indexes are trading
-
The S&P 500
SPX
was rising 23 points, or 0.5%, to 4,977 -
The Dow Jones Industrial Average
DJIA
was adding 132 points, or 0.3%, to 38,660 -
The Nasdaq Composite
COMP
was climbing 84 points, or 0.5%, to 15,690
On Tuesday, the Dow industrials rose 0.4% to 38,521, the S&P 500 increased 0.23% to 4,954 and the Nasdaq gained less than 0.1% to 15,609.
What’s driving markets
With 10-year Treasury yields again consolidating around the 4.1% level as traders come to terms with the likely prospect of waiting until May for an interest-rate cut by the Fed, investors are refocusing attention on corporate prospects.
To that end, the earnings season trundles on, with traders keen to see that profits can support a market sitting near record highs.
Companies reporting figures on Wednesday include Uber Technologies
UBER,
CVS Health
CVS,
and Roblox before the opening bell on Wall Street, followed by PayPal
PYPL,
Walt Disney
DIS,
and Arm
ARM,
after the close.
Indications that the U.S. economy has managed to thrive during a period of sharply rising interest rates, thus supporting company earnings growth, has been a primary driver of the latest equity rally, according to Stephen Innes, managing partner at SPI Asset Management.
“S&P 500 operating earnings growth of around 5% year on year fosters bullish sentiment among investors,” Innes wrote in a Wednesday note. “Higher rates don’t appear to burden consumers or corporations significantly, enabling the Fed to wait longer to ensure inflation control without disrupting the stock market’s momentum amid robust U.S. growth dynamics.”
See: New York Community Bancorp’s stock closes at lowest level in 27 years as Yellen says she’s ‘concerned’ about commercial real estate risks
Investors continued to scrutinize the exposure of regional banks to the commercial real-estate sector with New York Community Bank
NYCB,
stock in free fall since reporting a surprise loss last week. Moody’s Investors Service downgraded the regional bank’s credit rating by two notches late Tuesday, lowering it into speculative-grade or “junk” status.
The bank’s shares were of 1.5% on Wednesday after it tried to reassure investors by naming an executive chair to its board and saying total deposits have increased in the last several weeks.
U.S. economic updates on Wednesday include the trade deficit, which rose slightly in December, but the annual gap still fell to the lowest level in three years and added to economic growth in 2023. January consumer credit is due out at 3 p.m. Eastern time.
Another raft of Federal Reserve officials will be making comments, too. New Fed governor Adriana Kugler will speak on policy and the economic outlook at 11 a.m. Eastern, Boston Fed President Susan Collins will discuss the economic outlook at 11:30 a.m., Richmond Fed President Tom Barkin will speak to the Economic Club of Washington, D.C., at 12:30 p.m., and Fed governor Michelle Bowman will talk about supporting small businesses at 2 p.m.
Companies in focus
-
Shares of Snap Inc.
SNAP,
-31.32%
plunged over 30% on Wednesday morning after the social-media company late Tuesday reported a revenue miss and offered a disappointing outlook. -
Ford Motor Co.
F,
+3.81%
rose 7.1% after the carmaker reported quarterly revenue above Wall Street’s expectations and announced a next-generation, smaller EV to rival Tesla Inc.’s upcoming Model 2. -
Shares of Chipotle Mexican Grill Inc.
CMG,
+6.68%
were up 1.5% after the Mexican fast-casual chain delivered well-received results and forecasts. -
Shares of Roblox Corp.
RBLX,
+11.38%
soared 8.5% after the videogame platform easily beat quarterly bookings estimates. -
Enphase Energy Inc. shares
ENPH,
+15.96%
jumped 18.9% on Wednesday morning after the alternative-energy company presented investors with a mixed quarter, but one that soothed more immediate concerns about the ailing sector.
