Today’s Stock Market: Stocks Remain Steady as Bond Market Pressure Eases Following Release of Cooler Economic Data | Lifestyle

Reading Time: 2 minutes

Stocks Drift as Mixed Profit Reports and Economic Signals Cause Uncertainty

NEW YORK (AP) — U.S. stocks were in a state of flux on Thursday as investors digested mixed profit reports from major companies and received signals that the economy may be cooling. The S&P 500 was down 0.2% in morning trading, with most stocks within the index and across Wall Street seeing gains. The Dow Jones Industrial Average was down 372 points, or 1%, while the Nasdaq composite was 0.3% lower.

Salesforce took a significant hit, losing roughly a fifth of its value, and was the main reason behind the Dow’s substantial decline. The company, known for helping businesses manage their customers, reported weaker revenue for the latest quarter than analysts had expected, although its profit exceeded estimates. Additionally, its forecasts for revenue in the current quarter and fiscal year fell short of Wall Street’s expectations, leading to a 19.8% drop in its shares.

Kohl’s fared even worse, plummeting 26.3% after reporting an unexpected loss for the latest quarter when analysts were anticipating a profit. The retailer cited a decrease in sales from the previous year as customers scaled back on clearance items. As a result, it revised its forecasts for sales and other financial targets for the year due to the setback.

Despite these setbacks, the market received a boost from better-than-expected profit reports from various companies. Best Buy exceeded forecasts, even though its sales fell short in the last quarter, leading to a 10.8% increase in its stock. Foot Locker also saw a 27.6% surge after reporting better-than-expected profit, despite falling short of analysts’ sales projections.

Easing Treasury yields in the bond market also contributed to the market’s overall positive sentiment, with most stocks on Wall Street climbing. The Russell 2000 index, which tracks smaller stocks, gained 0.8%.

The drop in yields provided relief after concerns about tepid demand for Treasury bonds following recent U.S. government auctions led to an increase in yields earlier in the week. Higher yields can put pressure on various investments.

Yields declined on Thursday following reports indicating that the U.S. economy may not be as robust as previously thought. This development raised hopes on Wall Street that the economy could cool down slightly, allowing the Federal Reserve to navigate a path where it can control high inflation without triggering a severe recession.

The upcoming release of the latest monthly update on a key inflation gauge preferred by the Federal Reserve is expected to be a significant data point on Friday. This report could influence market sentiment until the following week’s jobs report.

In the meantime, the tail end of earnings reporting season is likely to drive market movements. While profits have generally exceeded expectations for the start of 2024, investors are closely monitoring the performance of tech-related companies and retailers, particularly amid concerns about the impact of high inflation on consumer spending.

Overall, the market remains cautiously optimistic, with investors closely watching economic indicators and corporate earnings reports for clues about the future direction of stocks. The uncertainty surrounding the economy and corporate performance underscores the need for vigilance and strategic decision-making in the current market environment.