US STOCKS-Dow ends higher, but Treasury yields pressure market

BY Reuters | TREASURY | 05/08/24 04:00 PM EDT

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Dow's 6th straight win; best since 9-session stretch in Dec

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Uber (UBER) falls on weak Q2 gross bookings forecast

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Intel (INTC) down after Q2 revenue warning

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Utilities index up for 14th session in last 16

(Updates to close)

By David French

May 8 (Reuters) - The Dow Jones Industrial Average closed higher on Wednesday, stretching its winning streak to six straight, as investors kept betting on supportive U.S. monetary policy.

The other Wall Street benchmarks cooled a touch as momentum stalled and U.S. Treasury yields rose on the day of a 10-year notes auction. The S&P 500 ended essentially flat after four sessions of gains, and the Nasdaq Composite slipped to a second consecutive decline.

There was not much news to move the indexes, outside of reports from individual companies.

"We're just waiting for the next catalyst to jump-start the direction in the market, and we're probably going to get that next week," said Ameriprise Chief Market Strategist Anthony Saglimbene. The Producer Price Index (PPI) is due on May 14, and the Consumer Price Index (CPI) scheduled for May 15.

"I think traders are reluctant to take broader stocks or broader averages higher, until they get a fresh update on inflation," he added.

The S&P 500 has leveled off close to the 5,200 mark, which is last closed above on April 9. On Wednesday, it was hampered by sliding shares of Uber (UBER) which posted a surprise quarterly loss and issued a downbeat forecast.

The ride-hailing platform was among the S&P 500's biggest decliners, after it forecast second-quarter gross bookings would not meet expectations.

Tesla fell after Reuters reported U.S. prosecutors were examining whether the company committed securities or wire fraud by misleading investors and consumers about its electric vehicles' self-driving capabilities.

Other megacap stocks such as Amazon (AMZN) and Alphabet slipped as the 10-year Treasury yield edged up.

Rising yields helped dampen optimism spurred by a positive earnings season and softer-than-expected labor market data last week that had tempered concerns about the Federal Reserve keeping interest rates higher for longer.

Traders are pricing in a 67% chance of the Fed cutting rates by at least 25 basis points in September, according to the CMEGroup's Fedwatch tool, up from about 54% a week ago.

Fed policymakers who spoke on Wednesday stayed consistent to recent messaging, including at the U.S. central bank's policy meeting last week.

Boston President Susan Collins said the current setting of monetary policy will slow the economy in the way she believes will be necessary to get inflation back to the Fed's 2% target.

According to preliminary data, the S&P 500 lost 0.09 points, or 0.00%, to end at 5,187.61 points, while the Nasdaq Composite lost 29.80 points, or 0.18%, to 16,302.76. The Dow Jones Industrial Average rose 172.45 points, or 0.44%, to 39,056.71.

Among S&P sectors, utilities finished higher for the 14th time in 16 sessions, boosted as Vistra Corp (VST) jumped after reporting strong earnings.

Among the heaviest declines were real estate and consumer discretionary.

Intel (INTC) fell after warning of a sales hit from the U.S. revoking some of the chipmaker's export licenses for China.

Tripadvisor (TRIP) tumbled after the online travel agency ruled out a possible sale at this time and posted a surprise quarterly loss.

Uber (UBER) rival Lyft (LYFT) climbed after projecting higher-than-expected gross bookings and a core profit for the current quarter. (Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru and David French in New York; Editing by Shinjini Ganguli, Devika Syamnath and David Gregorio)

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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