Tags: financial markets | treasury yields

Dow Ends Higher, But Treasury Yields Pressure Market

Dow Ends Higher, But Treasury Yields Pressure Market
A New York Stock Exchange floor broker (Spencer Platt/Getty Images)

Wednesday, 08 May 2024 04:06 PM EDT

The Dow Jones Industrial Average closed higher Wednesday, stretching its winning streak to six straight, as investors kept betting on supportive U.S. monetary policy.

The other Wall Street benchmarks cooled a touch as momentum stalled and U.S. Treasury yields rose on the day of a 10-year notes auction. The S&P 500 ended essentially flat after four sessions of gains, and the Nasdaq Composite slipped to a second consecutive decline.

There was not much news to move the indexes, outside of reports from individual companies.

"We're just waiting for the next catalyst to jump-start the direction in the market, and we're probably going to get that next week," said Ameriprise Chief Market Strategist Anthony Saglimbene. The Producer Price Index (PPI) is due on May 14, and the Consumer Price Index (CPI) scheduled for May 15.

"I think traders are reluctant to take broader stocks or broader averages higher, until they get a fresh update on inflation," he added.

The S&P 500 has leveled off close to the 5,200 mark, which is last closed above on April 9. On Wednesday, it was hampered by sliding shares of Uber which posted a surprise quarterly loss and issued a downbeat forecast.

The ride-hailing platform was among the S&P 500's biggest decliners, after it forecast second-quarter gross bookings would not meet expectations.

Tesla fell after Reuters reported U.S. prosecutors were examining whether the company committed securities or wire fraud by misleading investors and consumers about its electric vehicles' self-driving capabilities.

Other megacap stocks such as Amazon and Alphabet slipped as the 10-year Treasury yield edged up.

Rising yields helped dampen optimism spurred by a positive earnings season and softer-than-expected labor market data last week that had tempered concerns about the Federal Reserve keeping interest rates higher for longer.

Traders are pricing in a 67% chance of the Fed cutting rates by at least 25 basis points in September, according to the CMEGroup's Fedwatch tool, up from about 54% a week ago.

Fed policymakers who spoke on Wednesday stayed consistent to recent messaging, including at the U.S. central bank's policy meeting last week.

Boston President Susan Collins said the current setting of monetary policy will slow the economy in the way she believes will be necessary to get inflation back to the Fed's 2% target.

According to preliminary data, the S&P 500 lost 0.09 points, or 0.00%, to end at 5,187.61 points, while the Nasdaq Composite lost 29.80 points, or 0.18%, to 16,302.76. The Dow Jones Industrial Average rose 172.45 points, or 0.44%, to 39,056.71.

Among S&P sectors, utilities finished higher for the 14th time in 16 sessions, boosted as Vistra Corp. jumped after reporting strong earnings.

Among the heaviest declines were real estate and consumer discretionary.

Intel fell after warning of a sales hit from the U.S. revoking some of the chipmaker's export licenses for China.

Tripadvisor tumbled after the online travel agency ruled out a possible sale at this time and posted a surprise quarterly loss.

Uber rival Lyft climbed after projecting higher-than-expected gross bookings and a core profit for the current quarter.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
The Dow Jones Industrial Average closed higher Wednesday, stretching its winning streak to six straight, as investors kept betting on supportive U.S. monetary policy.
financial markets, treasury yields
509
2024-06-08
Wednesday, 08 May 2024 04:06 PM
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