STOCK MARKET SNAPSHOT FOR 31/01/2024

NASDAQ-Adv: 2,975 Dec: 1,314 NYSE-Adv: 3,009 Dec: 1,020 (Source: Nasdaq)

The benchmark S&P 500 was subdued on Tuesday as investors assessed earnings reports from legacy companies United Parcel Service and General Motors, as well as data that signaled a mixed labor market.

United Parcel Service (UPS.N), opens new tab slumped 7.8%, after the package delivery giant forecast annual revenue below estimates.

The Dow Jones Transport Average index (.DJT), opens new tab fell 0.9% to a one-week low after FedEx (FDX.N), opens new tab also dropped 1.8%, and JetBlue Airways (JBLU.O), opens new tab shed 6.5% following its bleak first-quarter forecast.

Meanwhile, General Motors (GM.N), opens new tab jumped 6.6% after the automotive firm forecast upbeat earnings for 2024 and signaled more capital return to shareholders. Automaker Ford Motor (F.N), opens new tab also gained 1.6%.

After the Labor Department’s report showed U.S. job openings unexpectedly rose in December among other things, the focus will now be on the U.S. Federal Reserve’s two-day policy meeting during the day.

Investors are awaiting the policy decision from the Fed, which is widely expected to leave the key benchmark rate unchanged at 5.25% to 5.50%, and clues on when it could commence rate cuts.

“The Fed should not be cutting rates nearly as much as what the markets are thinking. My biggest fear is that they do cut rates and then inflation starts to pick back up again,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.

While high hopes of nearing rate cuts have supported a steep ascent in megacaps recently, quarterly company earnings will be key in rationalizing the rich valuations of the momentum stocks after Tesla (TSLA.O), opens new tab and Intel’s (INTC.O), opens new tab bleak forecasts last week.

Alphabet (GOOGL.O), opens new tab dipped 0.7% and Microsoft (MSFT.O), opens new tab was flat ahead of results expected after market close. Meanwhile, Apple (AAPL.O), opens new tab fell 1.5%, dragging the tech-heavy Nasdaq.

While the impact of generative AI is expected to steer the best revenue growth in nearly two years for Microsoft, the effect is likely to be muted for Alphabet’s advertising business.
About 78.5% of the S&P 500 companies that have reported earnings thus far have surpassed expectations, compared with a long-term average of 67%, according to LSEG data.

The benchmark S&P 500 (.SPX), opens new tab has notched several new records this month, including a fresh one on Tuesday.

At 11:42 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab was up 35.88 points, or 0.09%, at 38,369.33, the S&P 500 (.SPX), opens new tab was down 1.08 points, or 0.02%, at 4,926.85, and the Nasdaq Composite (.IXIC), opens new tab was down 63.54 points, or 0.41%, at 15,564.50.

Real-estate (.SPLRCR), opens new tab was the worst hit among the 11 S&P 500 sector indexes.

Citigroup (C.N), opens new tab and Bank of America (BAC.N), opens new tab rose over 3% following rating upgrades from Morgan Stanley (MS.N), opens new tab, pushing the S&P 500 banks index (.SPXBK), opens new tab up 1.8%.

Johnson Controls (JCI.N), opens new tab dropped 4.4% after the Ireland-based firm lowered its full-year profit expectations, while MSCI (MSCI.N), opens new tab advanced 11.1% after the index provider posted a higher fourth-quarter profit.

Super Micro Computer (SMCI.O), opens new tab jumped 3.1%, after the server seller projected stronger-than-expected quarterly sales.

Declining issues outnumbered advancers for a 1.47-to-1 ratio on the NYSE and a 2.02-to-1 ratio on the Nasdaq.

The S&P index recorded 55 new 52-week highs and no new lows, while the Nasdaq recorded 101 new highs and 53 new lows.
Source: Reuters (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli)