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Financial Markets 10/29 09:32
NEW YORK (AP) -- Wall Street is muddling through a mixed Tuesday of trading
as drops for homebuilders and Ford Motor offset rising tech and health care
stocks.
The S&P 500 was virtually unchanged in morning trading and hanging near its
all-time high set earlier this month. The Dow Jones Industrial Average was up 5
points, or less than 0.1%, as of 10:10 a.m. Eastern time, while the Nasdaq
composite was 0.1% higher and sitting just below its own record set in July.
Ford sank 8.2% after saying an underlying measure of profit for the full
year will likely come in at the bottom end of its forecasted range. The
automaker said stubbornly high warranty expenses and other costs are holding
back its profits, though its results for the third quarter were better than
analysts expected.
JetBlue Airways lost 14.1% even though its results for the latest quarter
were better than analysts expected. The carrier said its revenue could fall
between 3% and 7% in the last three months of 2024 from a year earlier, hurt by
this month's Hurricane Milton and the upcoming U.S. presidential election.
D.R. Horton tumbled 12.4% after the homebuilder reported weaker profit and
revenue for the latest quarter than analysts expected. Executive Chairman David
Auld said some potential home buyers are waiting for mortgage rates to become
more affordable and are sitting on the sidelines. D.R. Horton's results dragged
down stocks of other homebuilders, and Lennar and PulteGroup both fell at least
4%.
Mortgage rates have been climbing recently because the 10-year Treasury
yield has been charging higher.
Yields have rallied as report after report has shown the U.S. economy
remains stronger than expected. On Tuesday, reports said that confidence among
U.S. consumers jumped more economists expected, while the number of job
openings edged lower in September, but the number of hires remained steady.
Such numbers are forcing traders to ratchet back forecasts for how deeply
the Federal Reserve will cut interest rates, now that it's just as focused on
keeping the economy humming as getting inflation down. A small number of
traders are even betting on the possibility the Fed will keep its main interest
rate steady next month, according to data from CME Group. That's after the Fed
kicked off its rate-cutting campaign in September with a larger-than-usual
reduction.
With bets diminishing on how much the Fed will ultimately cut rates,
Treasury yields have been given back some of their earlier declines.
Yields have also climbed as investors have seen former President Donald
Trump's chances of re-election improving. Economists say a Trump win could help
push inflation higher in the long term, and worsening inflation could push the
Fed to hike interest rates.
Trump Media & Technology Group, the company that tends to move more with
Trump's re-election odds than on its own profit prospects, climbed another 7.2%
to $50.760 Tuesday. The parent company of Trump's Truth Social platform has
been rallying since hitting a bottom of roughly $12 in late September.
Another winner was McDonald's, which added 0.9% after edging past analysts'
forecasts for profit and revenue int he latest quarter. That was even though an
important underlying measure of revenue sank more in the latest quarter than
Wall Street was expecting. The fast-food chain is also still smarting from the
effects of a recent E. coli outbreak.
Several Big Tech stocks were also among the strongest forces pushing upward
on the S&P 500. That includes Alphabet, which will be the latest member of the
influential group of stocks known as the "Magnificent Seven" to report its
quarter results after trading ends for the day. The parent company of Google
added 0.7%.
Treasury yields climbed again Tuesday, and the 10-year yield rose to 4.31%
from 4.28% late Monday and just 3.60% in the middle of last month. Treasury
yields, like stocks, have historically tended to be shaky heading into an
Election Day, only to calm afterward regardless of which party wins.
In stock markets abroad, indexes mostly made modest moves outside of a 1.1%
drop for stocks in Shanghai.
Crude oil prices edged higher to regain some of their sharp 6.1% drop from
the prior day. Brent crude, the international standard, rose 0.5%.
Worries about an expanding war in the Middle East had sent the price of
Brent up to nearly $81 per barrel in early October, despite signals that plenty
of oil is available for the global economy. It's since fallen back below $72.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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