Stock market today: Wall Street holds relatively steady near record highs

Feb 27, 2024

NEW YORK (AP) — U.S. stocks are holding relatively steady Tuesday following mixed profit reports from Macy’s, Lowe’s and other big companies.

The S&P 500 was virtually unchanged in early trading, still near its record set last week. The Dow Jones Industrial Average was down 113 points, or 0.3%, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.

Nvidia was one of the heaviest weights on the market and fell 1.6% to take a tiny bit of the shine off its jaw-dropping run. Its stock is still up more than 50% so far this year after soaring nearly 240% last year amid Wall Street’s frenzy around artificial-intelligence technology.

Macy’s climbed 4.8% after reporting better results for the latest quarter than feared. It also announced a sweeping reorganization as it tries to kickstart growth in revenue. It will close about 150 stores and focus on opening new Bloomingdale’s and BlueMercury locations.

Norwegian Cruise Line Holdings steamed 14% higher despite reporting a larger loss for the latest quarter than expected. It said it’s seeing healthy demand from customers, and it gave a forecast for earnings this upcoming year that was bigger than analysts’ own.

AutoZone revved 3.8% higher after it reported a stronger profit than expected. Much of its growth last quarter came from its stores in Mexico and Brazil.

Zoom Video Communications also jumped after topping analysts’ forecasts for profit last quarter. It rose 4.9% to $66.19, though it’s still well below its peak above $500 during the height of the pandemic. It also announced a program to buy back up to $1.5 billion of its stock, which would send cash directly to shareholders.

Lowe’s rose 1.8% after reporting a better profit for the latest quarter than analysts expected. It also gave a forecast for revenue this upcoming year that was weaker than analysts had penciled in, and it said a slowdown is continuing for DIY projects.

Earnings reporting season is winding down for the big companies in the S&P 500, and the hope is that a remarkably solid U.S. economy will help profits grow through this year.

A report in the morning showed orders for long-lasting manufactured goods were weaker last month than economists expected, but they were better than forecast after ignoring airplanes and other transportation items.

Treasury yields were mixed but holding relatively steady following the report. Yields have been climbing so far this year as traders push back forecasts for when the Federal Reserve may begin cutting interest rates.

The Fed has already pulled its main interest rate to the highest level since 2001 in hopes of grinding down high inflation. With inflation cooling since its peak two years ago, the Fed has said it may cut rates several times this year. But a suite of stronger-than-expected reports on the economy have pushed back expectations for the start of those cuts toward June from March.

In the meantime, Wall Street is treading near its record levels and confronting criticism that prices have gone too high.

One worry has centered on how much of the market’s gains has been attributable to just a small group of huge companies, particularly those swept up in the frenzy around artificial-intelligence technology. Nvidia has quickly become the third-largest stock on Wall Street.

That’s helped the S&P 500 index because a 1% move for the biggest stocks carries much more weight on it than a 1% move for a smaller stock. To see how top heavy the market has become, consider how the S&P 500 would be behaving if it gave each stock the same weight.

The S&P 500 is beating that equal-weighted index on a one-year rolling basis by a wide margin, “just a whisker shy of the bubble record highs,” according to strategists at Barclays.

Unlike that bubble, though, the companies driving the growth this time are actually making profits and not driven by just hype.

“As such the investment case for continued outperformance remains intact, but arguably more vulnerable to occasional corrections, given ebullient sentiment,” according to the strategists led by Stefano Pascale and Anshul Gupta.

In stock markets abroad, indexes were mostly higher across Asia and Europe. Stocks jumped 1.3% in Shanghai but sank 0.8% in Seoul. Tokyo’s Nikkei 225 was little changed, remaining near its highest level in history.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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