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Financial Markets 12/09 09:41
NEW YORK (AP) -- U.S. stocks are holding relatively steady on Tuesday as
Wall Street waits to hear what the Federal Reserve will say on Wednesday about
where interest rates are heading.
The S&P 500 rose 0.1% in morning trading, coming off just its second loss in
the last 11 days. The Dow Jones Industrial Average was up 122 points, or 0.3%,
as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Exxon Mobil was the strongest force lifting the S&P 500. It climbed 3.4%
after increasing its forecast for profit over the next five years, thanks in
part to strength for its fields in the Permian basin in the United States and
off Guyana's shore.
CVS Health rose 3.3% after unveiling new financial forecasts, including
expectations for annual compounded growth in earnings per share at a
"mid-teens" percentage over the next three years.
"We are committed to doing what we say," said Chief Financial Officer Brian
Newman, who also said CVS Health is closing out 2025 with strong momentum.
They helped work against a 3.2% drop for homebuilder Toll Brothers and a
3.7% fall for AutoZone, which both reported weaker results for the latest
quarter than analysts expected.
Toll Brothers CEO Douglas Yearley Jr. said demand for new homes remains soft
across many markets. But he pointed to how his company's luxury homes aim more
at affluent customers, who may be less hurt by "affordability pressures" than
other potential homebuyers.
One big factor in that affordability question is mortgage rates. They're
lower than they were at the start of the year, but they perked up a bit after
October. That's largely because of questions in the bond market about how much
more the Federal Reserve will cut its main interest rate.
The widespread expectation is that the Fed will cut interest rates Wednesday
afternoon, which would be the third such easing of the year. Lower interest
rates can give the economy and prices for investments a boost, but the downside
is they can worsen inflation.
The U.S. stock market has run to the edge of its records in part because of
high expectations that the Fed will cut rates again on Wednesday.
The big question is what the Fed will say about where interest rates will go
after that. Many on Wall Street are bracing for talk aimed at tamping down
expectations for more cuts in 2026.
Inflation has stubbornly remained above the Fed's 2% target, and Fed
officials are notably split in their opinions about whether high inflation or
the slowing job market is the bigger threat to the economy.
Treasury yields climbed in the bond market after a report on Tuesday showed
that U.S. employers were advertising 7.7 million job openings at the end of
October. That's up a smidgen from the month before and the highest since May.
If the job market is not worsening, it may not need as much help from the
Fed through more cuts to rates.
The yield on the 10-year Treasury erased what had been a dip after the
report on job openings came out to sit at 4.17%, where it was late Monday.
The yield on the two-year Treasury, which moves more closely with
expectations for what the Fed will do, rose to 3.60% from 3.57% late Monday.
Elsewhere on Wall Street, Ares Management climbed 6.7% after S&P Dow Jones
Indices said the investment company will join its widely followed S&P 500
index. It will replace Kellanova, the maker of Pringles and Pop-Tarts, which is
being bought by Mars, the company behind Snickers and M&Ms.
Home Depot flipped an early loss and added 0.7%. It gave a preliminary
forecast for 2026 that said the broad home improvement market may shrink by up
to 1%. But it also gave a separate set of forecasts saying its earnings per
share could grow in the mid- to high-single digit percentages if the housing
market recovers.
The market's most influential stock, Nvidia, slipped 0.6% after President
Donald Trump allowed it to sell an advanced chip used in
artificial-intelligence technology to "approved customers" in China. The H200
is not Nvidia's top product.
In stock markets abroad, indexes were mixed across Europe and Asia.
Indexes fell 1.3% in Hong Kong and 0.5% in Paris for two of the world's
bigger moves.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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