US STOCKS-Wall Street stocks mixed on higher Treasury yields, rate expectations

BY Reuters | ECONOMIC | 04/16/24 02:57 PM EDT

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UnitedHealth (UNH) gains on Q1 profit beat

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Fed Chair Jerome Powell sees higher rates for longer

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Indexes: Dow up 0.23%, S&P down 0.08%, Nasdaq up 0.01%

(Updates to 1449 ET)

By Chibuike Oguh

April 16 (Reuters) -

Wall Street stocks were mixed on Tuesday as Treasury yields climbed, with investors weighing the likely path of interest rates in a resilient U.S. economy with persistent inflation.

Federal Reserve Chair Jerome Powell said on Tuesday recent inflation data

has not given

policymakers enough confidence to ease credit soon, noting that the U.S. central bank may need to keep rates higher for longer than previously thought.

The Dow Jones Industrial Average got a boost from UnitedHealth Group's (UNH) better-than-expected quarterly results.

"People are trying to balance this two-sided narrative: U.S. economic growth, which looks really good, and at the same time the inflation picture and interest rates, which will eventually be problematic for the equity market," said James St. Aubin, chief investment officer at Sierra Mutual Funds in California.

A report on Monday showed retail sales grew more than expected in March, a sign of U.S. economic resilience that helped push benchmark U.S. 10-year Treasury yields to five-month highs on Tuesday.

As of 02:49 p.m. the Dow Jones Industrial Average rose 86.69 points, or 0.23%, to 37,821.80, the S&P 500 lost 3.82 points, or 0.08%, to 5,058.00 and the Nasdaq Composite gained 2.13 points, or 0.01%, to 15,886.66.

The S&P 500 and the Nasdaq are nearly 4% off from record high levels reached last month.

Shares of

Morgan Stanley (MS)

added 3.7% after its first-quarter profit beat estimates on resurging income from investment banking.

Bank of America (BAC) dropped 3.9% after the lender posted lower first-quarter profits as its loan loss provisions grew.

Johnson & Johnson (JNJ) slipped 1.6% as the drugmaker's revenue missed analysts' estimates after sales from its blockbuster psoriasis drug, Stelara, fell short of expectations.

Tesla shed 2.7%, a day after falling over 5% on news that the EV marker plans to lay off more than 10% of its global workforce.

Declining issues outnumbered advancers by a 2.42-to-1 ratio on the NYSE, which had 16 new highs and 154 new lows. On the Nasdaq, 1,487 stocks rose and 2,641 fell as declining issues outnumbered advancers by a 1.78-to-1 ratio.

The S&P 500 posted one new 52-week high and eight new lows while the Nasdaq recorded 27 new highs and 329 new lows.

(Reporting by Chibuike Oguh in New York; additional reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Richard Chang)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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