JetBlue Airways Inc. shares rose 10.7% after the company reported a profit in the spring, despite analysts predicting a loss, and also outlined efforts to improve on-time performance and attract customers.
Leading the way on Wall Street were Merck, which fell 6.3% despite reporting better-than-expected results last quarter. The company gave a profit outlook for the current fiscal year that fell short of analysts’ expectations, due in part to costs related to its acquisition of iBiotech.
Procter & Gamble Co. fell 6.7 percent after its latest quarterly profit beat expectations but sales fell short of expectations. The company has been hit by the impact of currency fluctuations on its overseas sales and expects that to continue as a challenge in the next fiscal year.
Wall Street has been relatively quiet so far this week ahead of earnings reports from some of the market’s most influential companies. Microsoft is scheduled to report its spring earnings after the close on Tuesday, while Meta Platforms, Apple and Amazon are due to release theirs in the coming days.
The four stocks are part of a small group of big tech names that have helped propel the S&P 500 to dozens of record highs this year, fueled in part by investor enthusiasm for artificial intelligence technologies, but have lost steam this month amid criticism that their shares were too expensive and expectations were too high.
Last week, investors were left disappointed by earnings reports from Tesla and Alphabet, raising concerns that other stocks in a group known as the “Magnificent Seven” of big tech companies could also disappoint.
Fortunately for the market, other stocks, including small and mid-cap stocks and companies whose profits are closely tied to the strength of the economy, rose, cushioning the decline. These stocks rose on hopes that inflation has slowed enough that the Federal Reserve will soon start cutting interest rates.
The Russell 2000 index of small-cap stocks rose 0.9%, leading the market on Tuesday.
The Fed announces its policy decision on Wednesday and no one expects it to cut rates this week, but there is widespread expectation a cut will come at its next meeting in September.
The Federal Reserve has raised interest rates 11 times since March 2022 to rein in inflation that has taken hold as the economy recovers from the pandemic-induced recession. Fed officials have left interest rates unchanged for about a year, at their highest level in more than two decades.
Expectations of lower interest rates have sent yields tumbling in the bond market but they remained relatively steady on Tuesday. The yield on the 10-year Treasury note fell slightly to 4.16% from Monday’s close of 4.17% and from 4.70% in April.
Overseas stock markets, Asian and European stock indexes were mixed ahead of potentially game-changing central bank decisions.
Japan’s Nikkei stock average rose 0.1 percent ahead of a Bank of Japan meeting where interest rates are expected to rise.
London’s FTSE 100 index fell 0.1 percent ahead of a decision by the Bank of England signalling a possible interest rate cut.
Continental European indexes rose after official data released on Tuesday by the European Union’s statistics office, Eurostat, showed second-quarter economic growth in the 20 euro zone countries was slightly stronger than expected.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
Credit: AP
Credit: AP
Credit: AP
Credit: AP
Credit: AP
Credit: AP
