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Nvidia rallies after HSBC upgrade
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Lockheed Martin shares up after results
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VIX falls to lowest point since Jan 2022
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Indexes: Dow up 0.08%, S&P up 0.11%, Nasdaq down 0.01%
(Updates with mid-afternoon trading)
By Lewis Krauskopf, Sruthi Shankar and Ankika Biswas
April 18 (Reuters) – Major U.S. stock indexes were little changed on Tuesday as disappointing quarterly reports from Johnson & Johnson and Goldman Sachs were countered by gains in some big technology stocks as first-quarter earnings season kicked into gear.
J&J shares fell 2.4% after the healthcare conglomerate cautioned investors over the lingering impact of inflation-driven costs this year. Goldman shares dropped 1.2% after the Wall Street firm’s profit fell 19% as dealmaking and bond trading slumped.
The early first-quarter 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 for 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.”
The Dow Jones Industrial Average rose 26.02 points, or 0.08%, to 34,013.2; the S&P 500 gained 4.46 points, or 0.11%, at 4,155.78; and the Nasdaq Composite dropped 1.50 points, or 0.01%, to 12,156.22.
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 gained 0.4%, helped by a 3% jump in shares of Nvidia Corp, after HSBC raised its recommendation on the graphics chipmaker to “buy” from “reduce.”
The healthcare sector dropped 0.5%, weighed down by J&J shares, while utilities fell 0.6%.
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.
The S&P 500 is trading near two-month highs as investors brace for a deluge of earnings and assess the path of interest rates 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 Federal Reserve President Raphael Bostic said the Fed most likely has one more rate hike ahead.
In other earnings news, U.S. weapons maker Lockheed Martin Corp’s first-quarter results surpassed Wall Street targets despite parts and labor shortages. Lockheed’s shares rose 2.7%.
Declining issues outnumbered advancers on the NYSE by a 1.11-to-1 ratio; on Nasdaq, a 1.37-to-1 ratio favored decliners.
The S&P 500 posted 26 new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and 112 new lows.
(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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