Financial Markets 02/21 15:31
NEW YORK (AP) -- Stocks ended mostly higher on Wall Street after a listless
day of trading. The S&P 500 edged up 0.1%. The Dow also added 0.1% after
turning slightly higher just before the close. Weakness in technology shares
weighed on the Nasdaq, which ended 0.3% lower. Palo Alto Networks sank more
than 28%. The network security company forecast billings that came in well
below what analysts were looking for. Amazon rose following news that it would
be added to the Dow. Walgreens Boots Alliance, which is leaving the Dow, fell.
The yield on the 10-year Treasury climbed to 4.32%.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.
NEW YORK (AP) -- Stocks fell on Wall Street Wednesday as weakness in
technology companies continues to drag on the market.
The S&P 500 slipped 0.5% in afternoon trading. The tech-heavy Nasdaq gave up
1.1% and the Dow Jones Industrial Average fell 178 points, or 0.5% as of 2:43
Palo Alto Networks was a big loser and a particularly heavy weight on the
technology sector. The network security company sank 27.2% after giving
forecasts for future billings that came in well below what analysts were
looking for. Its rival, Fortinet, slumped 4.6%.
Amazon rose 0.1% following an announcement that it would be added to the
Dow. Walgreens Boots Alliance, which is leaving the Dow, fell 3.3%
Bond yields remained relatively steady. The yield on the 10-year Treasury
rose to 4.32% from 4.28% late Tuesday.
Markets were mostly higher in Europe and mixed in Asia.
Earnings remained the big focus for Wall Street. Nvidia will report its
highly anticipated results later in the day. The chipmaker has tripled over the
past year thanks to a surge in investor enthusiasm over artificial intelligence.
Technology stocks drove much of the market's rally that brought it to new
records just last week. The sector is also showing some of the strongest
earnings growth. But, lopsided contributions from some of the bigger companies
in the sector have raised questions about whether the gains were overdone.
"In February we're seeing some of that settle out as we try and get a better
bead on how the full year is going to go," said Rob Haworth, senior portfolio
manager at U.S. Bank Wealth Management.
Several other companies made big moves following the release of their
financial results. Electronic measurement technology company Keysight
Technologies fell 7.3% after its profit forecast fell short of analysts'
expectations. Garmin, which makes personal navigation devices, jumped 10% after
beating earnings forecasts.
Toll Brothers rose 4.1% after giving investors an encouraging financial
update as it sees strong demand. That helped support gains throughout the
Energy companies gained ground as natural gas prices jumped 9%. Exxon Mobil
The Federal Reserve released minutes from its latest meeting in January that
showed most officials are worried about moving too fast to cut their benchmark
interest. The central bank left the rate alone for the fourth time in a row at
that meeting. Investors have all but lost hope that the central bank will cut
rates at its March meeting and are looking for the first rate cut to come in
Investors have to wait until next week for another key update on inflation.
That's when the government will release its monthly report on personal
consumption and expenses, the Fed's preferred measure of inflation. The central
bank's goal has been to tame inflation back to 2% and analysts expect that
report to show it cooled to 2.3% in January. Inflation by that measure peaked
at 7.1% in June of 2022.
"As long as the labor market holds up, the Fed can afford to slow walk rate
cuts," said Jamie Cox, managing partner for Harris Financial Group. "Inflation
fighting is much easier when the labor market cooperates."
Separate measures for consumer and wholesale prices in January show that
inflation didn't cool as much as anticipated. That prompted investors to shift
expectations for rate cuts from March to June. A weak report on retail sales
added to the disappointing inflation data and raised concerns that stubborn
inflation is inflicting more pain on consumers. Tighter consumer spending could
put more pressure on businesses in 2024.