S&P 500 ekes out gain as tech supports, J&J, Goldman disappoint
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[April 19, 2023] By
Lewis Krauskopf, Sruthi Shankar and Ankika Biswas
(Reuters) - The S&P 500 eked out a slim gain on Tuesday after strength
in some big technology stocks countered disappointing quarterly reports
from Johnson & Johnson and Goldman Sachs as first-quarter earnings
season kicked into gear.
The Dow and Nasdaq ended with fractional declines on the day.
J&J shares fell 2.8% after the healthcare conglomerate cautioned
investors over the lingering impact of inflation-driven costs this year.
Goldman shares dropped 1.7% after the Wall Street firm's profit fell 19%
as dealmaking and bond trading slumped.
The early quarterly results from S&P 500 companies come as investors
have been bracing for a gloomy reporting season, fearing the economy may
be on the cusp of a downturn.
"What we are seeing here is the calm before the storm as far as earnings
go," said Brad McMillan, chief investment officer of Commonwealth
Financial Network. "The market is just trying to see, do we have some
upside here or not, and I think it is really going to come down to
earnings over the next couple of weeks."
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The Dow Jones Industrial Average fell 10.55 points, or 0.03%, to
33,976.63, the S&P 500 gained 3.55 points, or 0.09%, to 4,154.87 and the
Nasdaq Composite dropped 4.31 points, or 0.04%, to 12,153.41.
The CBOE Volatility index, also known as Wall Street's fear gauge, fell
to its lowest point since January 2022 during the session.
The heavyweight technology sector rose 0.4%, helped by a 2.5% increase
in shares of Nvidia Corp after HSBC raised its recommendation on the
graphics chipmaker to "buy" from "reduce."
The healthcare sector dropped 0.7%, weighed down by J&J shares.
S&P 500 company earnings are expected to have declined 4.8% in the first
quarter from a year earlier, according to Refinitiv IBES data as of
Friday. Investors have zeroed in on bank results after the failure of
Silicon Valley Bank last month set off concerns about potential systemic
risks.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., April 14, 2023.
REUTERS/Brendan McDermid
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"While the big money center banks did very well as a whole, the
focus I think is going to be on the regional banks because that is
really where the center of the fallout was," said Paul Nolte, senior
wealth advisor and market strategist at Murphy & Sylvest Wealth
Management.
Shares of Netflix Inc fell in initial after-hours trading on Tuesday
following the company's quarterly report.
The S&P 500 is trading near two-month highs as investors await a
deluge of earnings and assess the interest rate path ahead of an
expected 25 basis point increase at the Federal Reserve's meeting
early next month.
St. Louis Federal Reserve President James Bullard told Reuters on
Tuesday the U.S. central bank should continue raising rates on the
back of recent data showing persistent inflation. Separately,
Atlanta Fed President Raphael Bostic said the Fed most likely has
one more rate hike ahead.
In other earnings news, Lockheed Martin Corp's shares rose 2.4%
after the U.S. weapons maker's first-quarter results surpassed Wall
Street targets despite parts and labor shortages.
Advancing issues outnumbered decliners on the NYSE by a 1.01-to-1
ratio; on Nasdaq, a 1.29-to-1 ratio favored decliners.
The S&P 500 posted 28 new 52-week highs and no new lows; the Nasdaq
Composite recorded 66 new highs and 143 new lows.
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About 9.8 billion shares changed hands in U.S. exchanges, compared
with the 10.7 billion daily average over the last 20 sessions.
(Reporting by Lewis Krauskopf in New York, Sruthi Shankar, Ankika
Biswas and Vansh Agarwal in Bengaluru; Editing by Sriraj Kalluvila,
Vinay Dwivedi and Richard Chang)
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