Stock market today: Stocks are lower as pressure from the bond market eases after cooling economic data

NEW YORK (AP) – U.S. stocks edged lower Thursday after mixed earnings reports from major companies and signs that the economy may be slowing.

The S&P 500 was down 0.2% in afternoon trade, although most stocks in the index and across Wall Street were rising. The Dow Jones Industrial Average was down 283 points, or 0.7%, as of 1:37 p.m. ET, and the Nasdaq composite was down 0.4%.

Salesforce was the main reason the Dow fell more than the rest of the market, losing a fifth of its value. The company, which helps businesses manage their customers, reported lower revenue for the latest quarter than analysts expected. It also provided revenue estimates for the current quarter and fiscal year that Wall Street missed. Shares are down 21%.

Kohl’s fell even more, 23%, after reporting a surprise loss for the latest quarter when analysts expected to see a profit. The retailer said sales were down by a quarter from a year ago as customers pulled back on purchases. It cut its sales forecasts and other financial targets this year because of the stumble.

Helping support the market were better-than-expected profit reports from a range of companies. Best Buy predicts that even though its sales decreased last quarter, its stock rose 12.5%. Foot Locker rose 18.2% after it also reported better-than-expected profit despite missing analysts’ forecasts.

Stocks were also boosted by easing Treasury yields in the bond market. That helped most stocks on Wall Street climb, with smaller stocks in the Russell 2000 index gaining 1.2%.

The drop in yields provided relief after they rose earlier this week on concerns of strong demand for Treasury bonds following several US government auctions. High yields put downward pressure on all types of investments.

Commodities fell on Thursday after several reports showed the US economy was not as strong as expected. The hope on Wall Street is that the economy can slow down, but not too much, so that the Federal Reserve can get to the point where it gets high inflation under control without causing a nasty recession.

Another report showed more US workers filed for unemployment benefits last week than expected, although the number of layoffs remained historically low. Another suggested overall growth in the US economy may not be as strong as previously thought.

A slowdown in the economy could give the Federal Reserve greater confidence that inflation is on track to meet its 2% target. That in turn could convince it to cut the federal funds rate, which has sat at its highest level in more than two decades.

The 10-year Treasury yield fell to 4.54% from 4.62% as of Wednesday. The two-year yield, which closely tracks expectations for Fed action, fell to 4.93% from 4.98%.

More important data will arrive on Friday, when the US government issues its monthly update on the rate of inflation the Federal Reserve prefers to use. That report “could control market sentiment until next Friday’s jobs report,” according to Chris Larkin, managing director, trading and investment, at E-Trade from Morgan Stanley.

Stubborn inflation earlier this year forced investors to repeatedly scale back their forecasts for a rate cut this year, which appeared to be overly optimistic.

Until then, the end of the earnings reporting season may provide the main drivers in the market. Profits were better than expected in early 2024.

Outside of Salesforce, other technology-related companies had a warm market reception to their latest earnings reports.

C3.ai jumped 19.9% ​​after the software company raised profit and revenue expectations for the latest quarter. HP gained 18.8% after giving previous estimates for earnings.

Many traders are also reporting, as they usually do to close each earnings season, and the assessment is high due to concerns about the main engine of the American economy, which is used by households. US. Rising inflation is taking its toll, especially on low income earners.

Dollar General swung between gains and losses after beating profit estimates and beating previous expectations for revenue in the latest quarter. The retailer, which serves mostly low-income customers, said it saw strong traffic growth at its stores through the quarter. It recently fell by 6%.

Build-A-Bear shares fell 13.2%. The company, where customers can build their own stuffed animals, reported a worse decline in revenue and results for the latest quarter than analysts expected. The company said it had to contend with a “weak spending environment” in general that weighed on its business.

In stock markets abroad, indices rose modestly in much of Europe after struggling in Asia. Japan’s Nikkei 225 fell 1.3%, South Korea’s Kospi fell 1.6% and Hong Kong’s Hang Seng fell 1.3%.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.