US stocks waver ahead of company earnings updates

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DEVELOPING… Story will be updated as new information can be verified. Updated 4 times

NEW YORK (AP) — Stocks wavered in uncertain trading on Wall Street Tuesday ahead of key updates this week on inflation and company earnings.

The S&P 500 rose 0.1% as of 12:10 p.m. Eastern. The benchmark index is roughly evenly split between gainers and losers and has shifted between a loss of 0.4% and a gain of 0.6% throughout the day.

The Dow Jones Industrial Average rose 45 points, or 0.1%, to 33,562. The Nasdaq rose 0.3%.

Technology stocks fell and health care stocks made solid gains.

Wall Street remains focused on inflation and its grip on the economy as the Federal Reserve stays aggressive in its fight against stubbornly high prices on food, clothing and other necessities. That has left investors closely watching economic data and updates from companies.

The next big marker for the market will be Thursday’s report on inflation at the consumer level. Economists expect it to show inflation slowed further to 6.5% last month from 7.1% in November.

Investors are also anticipating the latest round of corporate earnings. Updates from retailers have reinforced concerns about weaker sales amid hot inflation squeezing wallets. Macy’s and several others have warned investors about weaker results during the fourth quarter and into 2023.

Troubled home goods retailer Bed Bath & Beyond reported weak earnings, but announced more cost cuts as it tries to survive. The stock rose 19.1%.

Technology sector job cuts continued with the latest from crypto exchange Coinbase announcing it is laying off 20% of its workforce. The stock rose 4.7%.

Several big banks are on deck to report their results on Friday, including Bank of America and JPMorgan Chase. Delta Air Lines and UnitedHealth Group will also report results on Friday. Analysts are forecasting that this may mark the first year-over-year drop in earnings per share for S&P 500 companies since 2020.

Bond yields rose. The yield on the 10-year Treasury, which influences mortgage rates, climbed to 3.63% from 3.53%.

European markets were lower and Asian markets closed mixed overnight. Crude oil prices rose.

Investors remain concerned about the risk of a recession in 2023. The World Bank added to the list of of warnings on Tuesday. It said the global economy will come “perilously close” to a recession this year in its annual report.

A resilient employment market and strong consumer spending helped create a bulwark against a recession in the U.S. through much of 2022, but risks remain. The big concern is that the Fed will continue hitting the brakes too hard on economic growth and stall the broader economy. It has already hiked its key overnight rate to a range of 4.25% to 4.50% from roughly zero a year ago.

The economy could suffer a lag effect from continued interest rate hikes that pushes a recession off to the second half of the year, said Barry Bannister, chief equity strategist at Stifel. The global economy could also benefit from improvements in China’s economy as it moves on from the impact of COVID-19 and various restrictions that held back growth.

“You’re looking at a pretty good six months where things get better at the margins and then trouble starts to rear its head,” Bannister said.