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FILE – A person looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 16, 2024, in Tokyo.

AP Photo/Eugene Hoshiko, File

Stock market today: Wall Street drifts following more reports showing a resilient US economy

By The Canadian Press

Published 12:30 PDT, Thu April 18, 2024

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U.S. stock indexes are drifting Thursday, potentially putting the S&P 500 on track for a fifth straight loss.

The S&P 500 was 0.2 per cent lower in afternoon trading after flipping between small gains and losses through the day. That has it on pace for its longest losing streak since late October, when its big run to records began.

The Dow Jones Industrial Average was up 18 points, or less than 0.1 per cent, as of 3:05 p.m. Eastern time, and the Nasdaq composite was 0.4 per cent lower.

Equifax dropped 9.1 per cent for one of the market's bigger losses after it reported weaker revenue for the latest quarter than analysts expected. High interest rates are pressuring its mortgage credit inquiry business.

Las Vegas Sands fell 8.7 per cent even though it reported better results than expected. Analysts said investors may be worried about competition the casino and resort company is facing in Macau.

Helping to offset those losses was Elevance Health, which climbed 4.3 per cent after raising its profit forecast for the full year. Genuine Parts jumped 12.2 per cent for the biggest gain in the S&P 500 after the distributor of automotive and industrial replacement parts reported stronger profit for the latest quarter than analysts expected. It also raised its range for forecasted profits over the full year.

Stocks broadly have been struggling recently as yields in the bond market charge higher. They’re cranking up the pressure because investors have largely given up on hopes that the Federal Reserve will deliver many cuts to interest rates this year.

Yields climbed a bit higher after more reports on Thursday showed the U.S. economy remains stronger than expected.

One report said fewer workers applied for unemployment benefits last week than economists expected. It’s the latest sign that the job market remains remarkably solid despite high interest rates.

That resilience “continues to generate a solid flow of paychecks to keep fueling consumer demand,” according to Carl Riccadonna, chief U.S. economist at BNP Paribas. His team is forecasting the U.S. economy grew at a faster rate in the first three months of the year than many other economists.

Another report on Thursday said growth in manufacturing in the mid-Atlantic region accelerated sharply, when economists were expecting a contraction.

A third report said sales of previously occupied U.S. homes didn't fall as much last month as economists expected.

Similar such data, along with a string of reports showing inflation has remained hotter than forecast this year, pushed top Fed officials to say recently they could hold interest rates high for a while.

It’s a letdown after the Fed earlier had signaled three cuts to interest rates could be possible this year. But Fed officials have been adamant they want to be sure inflation is heading down toward their 2 per cent target before lowering the Fed’s main interest rate from its highest level since 2001.

Lower rates would juice the economy and financial markets, but they could also allow give inflation fuel to reaccelerate.

Traders are now forecasting just one or two cuts to rates this year, according to data from CME Group, down from expectations for six or more at the start of the year.

In the bond market, the yield on the 10-year Treasury rose to 4.64 per cent from 4.59 per cent late Wednesday. The two-year Treasury yield, which moves more closely with expectations for Fed action, rose to 4.98 per cent from 4.94 per cent.

The hoped-for upside on Wall Street of a strong economy that’s keeping interest rates high is that it could also drive strong growth in profits. Companies will need to deliver such strength in order to justify the run stock prices have been on since autumn, setting records along the way.

Alaska Air, the carrier that suffered a midflight blowout of a door plug on a Boeing aircraft in January, rose 4.3 per cent after it projected better profits for the current quarter than analysts expected.

Ally Financial jumped 7.1 per cent after reporting stronger earnings for the latest quarter than Wall Street had forecast.

Ibotta, a Walmart-backed digital company that offers customers cash-back rewards and rebates on grocery brands ranging from Nestle to Coca-Cola, jumped 18 per cent in its first day of trading.

In stock markets abroad, indexes rose modestly across much of Europe and Asia. South Korea's Kospi was a standout. It jumped 2 per cent to help lead markets worldwide.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

– Stan Choe, The Associated Press