NEW YORK (Reuters) -The tech-heavy Nasdaq lost ground on Tuesday as the market awaited a spate of high profile corporate earnings and the Federal Reserve convened for its monetary policy meeting.
The S&P 500 closed essentially unchanged, hovering near Monday’s all-time closing high, while the blue-chip Dow finished modestly higher.
Alphabet and Microsoft are expected to release their quarterly reports shortly after the market close.
“There’s a lot of trepidation over the start of the earnings releases from ‘the magnificent seven,’” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “The stocks have done incredibly well and there’s a little bit of caution being expressed right now and maybe rightly so.”
Economically sensitive sectors such as Dow Transports, chips and small caps were underperforming the broader market.
The Labor Department reported an unexpected rise in job openings, hinting that the market remains too solid for the Fed to consider cutting its key policy rate as soon as March.
The Fed is expected to end its policy meeting on Wednesday with a decision to let its key interest rate stand at 5.25%-5.50%. Its accompanying statement and Fed Chair Jerome Powell’s subsequent press conference will be parsed for clues on the timing and number of rate cuts this year.
“I’m going to be looking for language that matches the storyline that we hope to see in 2024, that sometime in the second quarter we’ll see the beginning of a reduction in rates,” Tuz added. “I’m going to be listening for language that confirms that that’s the most likely scenario.”
Fourth-quarter reporting season has shifted into overdrive, with 144 of the companies in the S&P 500 having reported. Of those, 78% have delivered consensus-beating earnings, according to LSEG.
On aggregate, analysts now expect fourth-quarter earnings growth of 5.5% over last year, up from the 4.7% seen at the beginning of the month, LSEG data showed.
United Parcel Service slid after the package deliverer issued a disappointing annual revenue forecast, weighing on transports.
General Motors jumped after the automaker provided an upbeat 2024 earnings forecast, and promised more capital return to shareholders.
Ford Motor also advanced.
Unofficially, the S&P 500 declined 0.06% to end the session at 4,924.94 points.
The Nasdaq declined 0.76% to 15,509.90 points, while Dow Jones Industrial Average rose 0.35% to 38,467.31 points.
Boeing Co shares slid ahead of its quarterly earnings report expected before Wednesday’s opening bell. Scrutiny into the planemaker is intensifying over certification of its 737 MAX 7 after a mid-air cabin blowout on Jan. 5.
Citigroup and Bank of America rose following rating upgrades from Morgan Stanley, lifting the S&P 500 banks index.
Johnson Controls dropped after the parts supplier lowered its full-year profit expectation, while MSCI advanced after the global index provider posted a higher fourth-quarter profit.
Super Micro Computer jumped after the server seller projected stronger-than-expected quarterly sales.
(Reporting by Stephen Culp: Additional reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Richard Chang)
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