U.S. stocks ended mixed Tuesday after consumer-confidence numbers and job-opening data pointed to a sturdy U.S. economy, while the Federal Reserve’s looming interest-rate decision and a busy earnings week from the likes of Microsoft are at the front of investors’ minds.
How stocks traded
- The Dow Jones Industrial Average rose 133.86 points, or 0.4%, to end at 38467.31 — its seventh record-high close of 2024, according to preliminary closing data from FactSet.
- The S&P 500 edged down 2.96 points, or less than 0.1%, to close at 4924.97.
- The Nasdaq Composite dropped 118.15 points, or 0.8%, to finish at 15509.90.
On Monday, the Dow Jones Industrial Average climbed 224 points, or 0.59%, to 38,333; the S&P 500 gained 37 points, or 0.76%, to 4,928; and the Nasdaq Composite rose 173 points, or 1.12%, to 15,628.
What drove markets
Investors had a new raft of economic data and corporate earnings to trade on Tuesday.
Job openings topped 9 million for the first time in three months, pointing to a resilient job market, according to the Labor Department. At the same time, number of quitting workers fell again, in a sign of softening.
Meanwhile, consumer confidence reached a two-year high as Americans begin to feel better about cooling inflation and improving economic prospects. That’s even as a new look at the housing market showed prices continuing to rise.
November home prices in the 20 largest U.S. metro areas climbed for the 10th straight month to a record high, according to the S&P CoreLogic Case-Shiller price index.
“The numbers we got on an economic front today actually were very supportive of the soft-landing scenario, with improving consumer confidence and still-good job-openings numbers,” said Lisa Erickson, head of the public markets group at U.S. Bank Wealth Management.
“The market is just having a little bit more indigestion today, though, in reaction than it has with previous economic releases,” Erickson said in a call. “I think what’s really going on is that the market has for the most part in the last week been optimistic and so it is just having a little bit of a giveback, worrying that the data might be a little too strong.”
The Fed is widely expected to announce Wednesday that it is sticking to its current benchmark interest rate, with questions remaining over when rate cuts will finally come.
Many investors are positioning for a soft landing with quickly-paced cuts, said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Co.
“It’s hard for me to imagine the Fed cutting as aggressively as the market priced in when the economy appears to be going strong,” Schutte said in a phone interview.
“We’re in an odd period of time” with competing data to inform the economy’s next direction, he noted.
Read also: The Fed may be ‘patient’ in cutting rates, says portfolio manager at Morgan Stanley
Schutte said the main events for investors this week are the Fed’s decision and press conference on Wednesday, followed by the December jobs report Friday. “To me, it’s all about how the Fed views the labor market,” he said, adding that he’ll be watching for data on wages in the job numbers.
But until then, there are lots of corporate earnings to sift through. Stock-market indexes have been powered higher by big gains for large technology stocks, including Microsoft MSFT.
Equity bulls are keen on Microsoft’s results and forecasts, due after Tuesday’s closing bell.
Four of the other so-called Magnificent Seven stocks will also publish earnings in the next few days: Alphabet GOOG GOOGL on Tuesday, then Apple AAPL, Amazon AMZN and Meta META on Thursday.
“The price reaction to 5 of the ‘Mag 7’ reports … [is] critical for overall market direction,” said Julian Emanuel, strategist at Evercore ISI.
Other companies delivering results on Tuesday include Pfizer PFE, General Motors GM, UPS UPS and HCA Healthcare HCA before the opening bell on Wall Street, followed after the close by Advanced Micro Devices AMD, Starbucks SBUX, Electronic Arts EA and Juniper Networks JNPR.
Companies in focus
- General Motors Co. GM shares ended 7.8% higher after a fourth-quarter earnings beat and rosy guidance. The carmaker notched $42.9 billion in revenue, ahead of FactSet expectations at $38.8 billion. “Consensus is growing that the U.S. economy, the job market and auto sales will continue to be resilient,” Mary Barra, GM’s chief executive, said in a shareholder letter.
- United Parcel Service Inc. UPS shares were 8.2% lower early Tuesday after a revenue miss and a disappointing outlook. The delivery giant’s $24.9 billion in revenue missed FactSet consensus of $25.4 billion and marked its sixth straight quarter of revenue misses.
- Pfizer Inc. PFE shares ended 1.7% lower Tuesday following an earnings beat and reaffirmation of the drugmaker’s 2024 guidance. Pfizer plans to begin the year with a “clean slate,” CEO Albert Bourla said earlier this month.
- Carnival Corp. CCL shares finished 0.5% lower Tuesday even after the cruise operator said it’s almost sold out for the first half of 2024, with its booking volumes since November hitting an all-time high.
— Jamie Chisholm contributed.
