Stock market news live updates: Stocks wobble as investors enter thick of earnings season
U.S. stocks struggled for direction at Tuesday’s open as a shortened but busy week packed with corporate earnings got underway on Wall Street.
The remainder of results out of the financial sector are set to trickle in across the coming days, with all eyes on megabanks Goldman Sachs (GS) and Morgan Stanley (MS) reporting results before the bell Tuesday after a lackluster round of quarterly updates from peers late last week.
Goldman Sachs recorded a larger-than-expected 69% drop in profit for the fourth quarter, taking a hit on a substantial drop-off in dealmaking revenue and a higher provision for loan losses. Shares fell 2.3% at the start of trading.
Morgan Stanley, meanwhile, reported a smaller-than-expected decline in profit. Like its Wall Street peers, the bank logged a drop in investment banking revenue, but higher net interest income and a record quarter for its wealth management business helped cushion overall numbers. Shares rose 4%.
Earnings reports out of other sectors will also ramp up in the coming days, with figures from Netflix (NFLX) on Thursday in focus. The update is likely to serve as a potential sign of things to come for the tech sector’s results, which are set to begin in earnest the following week.
The S&P 500 is expected to report a year-over-year decline in earnings of 3.9% for the fourth quarter, according to data from FactSet Research. This would mark the first year-over-year decline in earnings reported by the index since a 5.7% drop in the third quarter of 2020.
“We expect earnings to take the center stage going forward, where reactions to earnings have been getting bigger, while reactions to inflation/FOMC have been waning,” Bank of America’s Savita Subramanian and Ohsung Kwon wrote in a note Friday.
Global business leaders are gathering in the mountains of Davos, Switzerland, this week for the World Economic Forum. The prospect of a global recession, post-pandemic challenges, climate change, and the crisis in Eastern Europe are poised to top the agenda for the politicians, CEOs, and billionaires in attendance. European Central Bank President Christine Lagarde is among attendees.
The week ahead will also be busy with Fedspeak, with several members of the U.S. central bank set to deliver remarks in speeches throughout the country in coming days.
U.S. Treasury yields ticked higher Tuesday morning, with the benchmark 10-year note rising roughly 5 basis points to top 3.55%.
Oil futures were up slightly. West Texas Intermediate Crude Oil (WTI) futures traded around $80 per barrel as of 6:55 a.m. ET.
Tuesday’s moves come after a long weekend that saw the U.S. stock and bond markets closed on Monday, January 16, in observation of Martin Luther King Jr. Day. On Friday, all three major averages closed out their second consecutive winning week.
The technology-heavy Nasdaq Composite saw an outsized gain of 4.8% for the week, while the S&P 500 and Dow Jones Industrial Average registered their best performances since November, logging weekly advances of 2.7% and 2%, respectively.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc