Stocks, dollar mostly flat on soft data, corporate outlooks
(Adds closing prices, Microsoft results)
Dow 0.3%, S&P -0.1%, Nasdaq -0.3%
Microsoft beat estimates in closely watched results
Corporate beekeepers report mixed results
United States commercial activity contracts
NEW YORK/LONDON, Jan 24 (Reuters) – U.S. stock indexes closed mixed and the dollar fell slightly on Tuesday after companies warned of a tough year ahead along with some profit beat, while data showed that US business activity fell for a worrying seventh consecutive month in January.
S&P Global’s Flash US Composite Output Index last month rose to 46.6, below a reading of 50 where growth starts. The report showed that companies reported low demand amid still high inflation which is still a headwind to customer spending.
Real GDP growth is likely to turn negative in the first half of 2023, Bill Adams, chief economist for Comerica Bank in Dallas, said in a note.
“The economy may still avoid a recession,” he wrote. “But the many financial and economic indicators that economists use to predict business cycle turning points suggest that a recession is more likely near term.”
LS&P 500 and the Nasdaq closed slightly lower after bellwethers including 3M, Johnson & Johnson, Verizon and GE reported mixed results. The Dow rose as Traveler Cos, American Express and JPMorgan Chase provided nearly half of its gains.
After the market closed, Microsoft Corp posted a better-than-expected quarterly profit as a jump in revenue at its cloud services unit helped offset a slump in the personal computer market, sending its shares 4 % higher in after hours trading.
“What will really define whether the Nasdaq continues to do well this year is how the earnings outlook looks, with Microsoft starting today,” said King Lip, chief investment strategist at BakerAvenue Wealth Management in San Francisco.
By Monday the Nasdaq had gained almost 10% this year due to a reduction in interest rates and a rebound after a significant decline last year, said Lip.
The Dow Jones Industrial Average rose 0.31%, the S&P 500 lost 0.07% and the Nasdaq Composite fell 0.27%.
Earlier in Europe, S&P Global data for the euro zone reinforced expectations that the European Central Bank (ECB) will raise rates by another 50 basis points on February 2, a day after the Fed is expected to have raised rates by 25 basis points.
Eurozone business activity made a surprise return to growth in January, according to the S&P Global survey – the latest sign that the bloc’s slowdown may not be as deep as feared. .
The pan-European STOXX 600 index closed down 0.24%.
Overnight, Japan’s Nikkei closed at its highest level in more than a month, recovering all of its losses since the Bank of Japan’s surprise policy tweak last month. Many Asian markets remained closed for the Lunar New Year.
The MSCI world index of all countries gained 0.04% to hit a new five-month high.
The euro was flat at $1.0885, holding close to a nine-month high supported by expectations that the ECB may continue to raise rates to curb inflation, without worrying too much about growth. damage
Treasury yields were mostly lower in choppy trading as investors looked ahead to next week’s Fed policy meeting.
The yield on 10-year Treasury notes fell 6.8 basis points to 3.455%.
Germany’s 10-year yield was steady at 2.157%.
Crude oil prices fell on concerns about a global economic slowdown and an expected increase in US oil inventories.
US crude futures fell $1.49 to settle at $80.13 a barrel, while Brent settled $2.06 at $86.13.
Gold prices retreated from a nine-month high on a slight rise in the dollar and US bond yields, although hopes of slower rate hikes -Fed supported the market.
US gold futures rose 0.4% to $1,935.40 an ounce.
(Reporting by Herbert Lash, additional reporting by Alun John in London; Editing by Sharon Singleton, Josie Kao and Lisa Shumaker)