The S&P 500 and Nasdaq edged higher in a choppy trading session on Wednesday after quarterly results from a diverse set of companies, while tech stocks stabilized and U.S. Treasury yields pulled back from milestones.
The tech-heavy Nasdaq recovered after earlier in the session moving more than 10% below its record closing high on Nov. 19. A correction is confirmed when an index closes 10% or more below its record closing level. The Dow was logging a slim loss.
Results from Morgan Stanley and Bank of America were well received by investors as were reports from UnitedHealth and Procter & Gamble as fourth-quarter earnings season picks up.
Stocks have gotten off to a rocky start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech and growth shares. The benchmark S&P 500 is down about 4% so far this year.
"I think it is more of a transition day, more of a consolidation after the selling pressure, and low conviction until we get further along into the earnings season and then hearing from the Fed," said Keith Lerner, co-chief investment officer at Truist Advisory Services.
US stocks tumble on worries over higher interest rates
The Dow Jones Industrial Average fell 36.48 points, or 0.1%, to 35,331.99, the S&P 500 gained 3.82 points, or 0.08%, to 4,580.93 and the Nasdaq Composite added 31.62 points, or 0.22%, to 14,538.51.
The heavyweight tech sector rose 0.2%, while financials declined 0.9%, most among the S&P 500 sectors.
Stocks had tumbled on Tuesday, with the Nasdaq falling 2.6%, after weak results from Goldman Sachs and a spike in Treasury yields. U.S. Treasury yields eased after hitting fresh two-year highs earlier on Wednesday.
Investors are looking to next week's Fed policy meeting for more clarity on central bankers' plans to rein in inflation. Data last week showed U.S. consumer prices increased solidly in December, culminating in the largest annual rise in inflation in nearly four decades.
In company news, shares of Procter & Gamble rose 3.6% after the consumer goods company bumped up its annual sales forecast.
Bank of America Corp reported a better-than-expected 30% jump in quarterly profit, while Morgan Stanley also reported fourth-quarter profit which beat market expectations, following uneven results from other banks. Bank of America shares rose 0.8%, while Morgan Stanley shares gained 2.4%.
"JPMorgan, Goldman Sachs set the bar very low for Morgan Stanley and Bank of America. Even though the reports were not fantastic, they were better than what those lower expectations were," said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.
UnitedHealth shares rose 0.8% as the health insurer maintained its 2022 profit forecast.
Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.
The S&P 500 posted 12 new 52-week highs and seven new lows; the Nasdaq Composite recorded 18 new highs and 538 new lows.
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