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Financial Markets 05/20 15:38
NEW YORK (AP) -- Most U.S. stock indexes edged higher after a quiet day of
mixed trading Monday following their latest winning week.
The S&P 500 rose 4.86 points, or 0.1%, to 5,308.13 and pulled within 0.02 of
its record set last week. The Nasdaq composite gained 108.91, or 0.7%, to
16,794.87 to set its own all-time high.
The Dow Jones Industrial Average was the laggard. It slipped 196.82 points,
or 0.5%, to 39,806.77 in its first trading after closing above the 40,000 level
for the first time on Friday.
Norwegian Cruise Line helped lead the market and steamed 7.6% higher after
giving financial forecasts for the year that topped analysts' expectations. It
said demand is growing for cruises, and some of its competitors gained in its
wake. Carnival rose 7.3%, and Royal Caribbean Group gained 4.1%.
All three of the big U.S. stock indexes set records last week in large part
because of revived hopes that the Federal Reserve will be able to cut interest
rates this year as inflation hopefully cools. More reports showing big U.S.
companies are earning fatter profits than expected also boosted stock prices.
This upcoming week has few top-tier economic reports, like last week's
headliner that showed inflation may finally be heading back in the right
direction following a discouraging start to the year. But some potentially
market-moving reports on corporate profits are on the calendar.
Atop them all is Nvidia, whose rocket ride amid a frenzy around
artificial-intelligence technology has been a major reason for the S&P 500's
gains over the last year. It will report its latest quarterly results on
Wednesday, and expectations are high. Analysts are forecasting its revenue more
than tripled to $24.59 billion from a year earlier.
Its stock climbed 2.5% to bring its gain for the year so far to 91.4%.
Several retailers are also on the schedule, including Lowe's on Tuesday,
Target on Wednesday and Ross Stores on Thursday. They could offer more details
on how well spending by U.S. households is holding up. Pressure has been rising
on them amid still-high inflation, even if it's not as bad as before, and
cracks seem to be most visible among the lowest-income customers.
Target sank 2.1% after it said Monday it would cut prices on thousands of
everyday essentials, such as milk and diapers, in an acknowledgment of how
customers are looking for relief from higher prices.
In the oil market, crude prices eased modestly. They erased earlier gains
from overnight trading following the death of Iran's president in a helicopter
crash.
In the bond market, yields ticked a bit higher. The yield on the 10-year
Treasury rose to 4.44% from 4.42% late Friday. The two-year yield, which more
closely tracks expectations for Fed action, ticked up to 4.84% from 4.83%.
The Federal Reserve on Wednesday will release the minutes from its latest
meeting, where it again held its main interest rate at the highest level in
more than two decades. The hope is that the Fed can manage the delicate
balancing act of grinding down the economy through high interest rates by just
enough to get inflation under control but not so much that it causes a painful
recession.
Traders are putting an 88% probability on the Fed cutting its main interest
rate at least once this year, according to data from CME Group.
"The better reading for April is encouraging," Fed Vice Chair Philip
Jefferson said about the most recent inflation data in a speech Monday before
the Mortgage Bankers Association. But he also said inflation has been declining
"nowhere near as quickly as I would have liked."
In stock markets abroad, indexes were modestly higher across much of Asia
and Europe.
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AP Writers Matt Ott and Zimo Zhong contributed.
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