NEW YORK (AP) — A mixed set of profit reports from giants like Google’s parent company and Eli Lilly has stock indexes basically churning in place on Wall Street Wednesday.
The S&P 500 was 0.1% lower in early trading, still near its all-time high set earlier this month. The Dow Jones Industrial Average was up 16 points, or less than 0.1%, as of 9:37 a.m. Eastern time, and the Nasdaq composite was basically unchanged a day after setting its own record.
Alphabet rallied 6% after blowing past analysts’ forecasts for profit in the latest quarter, thanks largely to the performance of its Google business. It’s the latest of the highly influential group of stocks known as the “Magnificent Seven” to top high expectations for growth. They’ll need to, because critics say their prices have climbed too quickly even if artificial-intelligence technology is creating a new boom.
Computer chip companies have been some of the biggest winners of the AI rush, but Advanced Micro Devices helped drag stocks down across the industry after reporting profit for the latest quarter that only matched analysts’ expectations. It also gave a forecasted range for revenue for the end of 2024 whose midpoint was a bit below what analysts were estimating. AMD’s stock sank 9.7%.
Eli Lilly, meanwhile, tumbled 13.3% amid concerns about two of the drug maker’s blockbuster products, diabetes treatment Mounjaro and weight loss counterpart Zepbound. Eli Lilly reported weaker results for the latest quarter than analysts expected, as pharmaceutical wholesalers burned through inventories they had built up in previous quarters. Lilly also cut its forecast for profit over the full year of 2024.
In the bond market, yields were mixed following a jumbled set of data on the U.S. economy. Growth for the overall economy slowed during the summer from the spring, according to a preliminary estimate by the U.S. government. But the performance was slightly better than economists expected.
Another report suggested that employers outside the government accelerated their hiring this month, when economists were forecasting a slowdown. It could raise optimism for Friday’s more comprehensive jobs report coming from the U.S. government. Economists expect that to show the pace of hiring nearly halved in October.
A slowing economy is no surprise for Wall Street, not after the Federal Reserve hiked interest rates in hopes of braking enough on the economy to get inflation under control. The question is whether the Fed can help keep the economy out of a recession, now that it’s begun cutting interest rates in hopes of keeping the job market humming.
A string of stronger-than-expected reports on the economy has raised those hopes, but it’s also forced investors to ratchet back their expectations for how deeply the Fed will ultimately cut rates. A more solid economy would not require as much help through lower rates.
The yield on the 10-year Treasury fell to 4.22% from 4.26% late Tuesday, though it’s still well above the 3.60% level it fell to in the middle of last month.
The two-year Treasury yield, which moves more closely with expectations for Fed action, edged up to 4.11% from 4.10%.
In stock markets abroad, indexes were mostly lower in Europe and Asia despite a 1% rise for Japan’s Nikkei 225.
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AP Writers Matt Ott and Zimo Zhong contributed.
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