Wall Street Today | Icy Wall Street Faces Chill Waller Fedspeak
RECAP
U.S. stocks traded lower on a cold Tuesday in Manhattan as investors weighed corporate earnings and Fed's Waller mid-day comments called interest rate cuts and inflation a chill situation, "no need to rush."
The $Dow Jones Industrial Average (.DJI.US)$ lost 231 points, or 0.62%, to 37,360. The $S&P 500 Index (.SPX.US)$ fell 17 points, or 0.37%, to 4,750. $Nasdaq Composite Index (.IXIC.US)$ lost 28 points, or 0.19%, to 14,944.
MACRO
Fed's Waller Sees Rate Cuts This Year, But Nothing 'Rushed'
According to a speech by Fed Governor Christopher Waller, the Fed will cut rates slowly and carefully if inflation drops this year. He said there is no need for policy to be "rushed," MarketWatch reported.
"When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully," Waller said in remarks to the Brookings Institution.
While in many past cycles, the Fed cut rates quickly and by large amounts, this year, Waller said he sees "no reason to move as quickly or cut as rapidly as in the past."
Waller said that the Fed's interest-rate policy is now "set properly."
SECTORS
West Texas Intermediate (WTI) crude oil closed lower on Tuesday despite continued Middle East conflict.
$Crude Oil Futures(JAN5) (CLmain.US)$ Closed down US $0.63 to settle at $72 per barrel, while March Brent crude, the global benchmark, was last seen up US$0.06 to US$78.23.
The Houthi militant group struck a Greek-owned ship on Monday, continuing attacks on shipping in the Red Sea following US and UK strikes on the group last week. An Iranian missile attack on Kurdish groups in northern Iraq also added to Middle East tensions amid Israel's war on Hamas.
"Crude oil has been unable to hold on to any supply risk premium since October's Hamas incursion ... A sustained impact would require actual disruption to infrastructure, in our view," Deutsche Bank analyst Michael Hsueh told MT Newswires.
Shipping Stocks Rise as Latest Houthi Attack Thrusts Dry Bulk Fleet Into the Spotlight
hipping stocks were on the rise Tuesday despite Monday's ballistic missile attack on a U.S. -owned vessel in the Gulf of Aden.
The Gibraltar Eagle, an $Eagle Bulk Shipping (EGLE.US)$ container ship was struck by an anti-ship ballistic missile fired from Houthi-controlled Yemen, according to the U.S. military's Central Command. The U.S. Department of Transportation subsequently warned U.S. flag and U.S.-owned commercial vessels to avoid the area until further notice.
The ship reported no injuries or significant damage and is continuing its journey, according to Central Command.
COMPANIES
Goldman Sachs Stock Rises After Q4 Profit Rise and Beats Analyst Estimate
$Goldman Sachs (GS.US)$ rose Tuesday after the investment bank's fourth-quarter profit beat analysts' reduced expectations. Goldman Sachs said its net income for the three months ended Dec. 31 rose to $1.87 billion, or $5.48 a share, from $1.19 billion, or $3.32 a share, in the year-ago quarter.
Apple Shares Fall as Company Offers Discounts on iPhone, iPad Models in China
$Apple (AAPL.US)$ slipped 1.2% after the company said it's offering a discount of up to 500 Chinese yuan ($70.1) on iPhone 13, iPhone 14, iPhone 14 Plus and all iPhone 15 models in China from Thursday to Sunday, the company said on its website.
$Spirit Airlines (SAVE.US)$ shares plunged as much as 61% amid reports that a federal judge on Tuesday blocked $JetBlue Airways (JBLU.US)$'s planned $3.8 billion acquisition of the low-cost carrier.
PNC Profit Drops Over 40% In Q4
Regional bank earnings kicked off with $PNC Financial Services (PNC.US)$ Financial Services Group, which reported a sharp decline in profit.
AMD Shares Near Record, Nvidia Gain After KeyBanc Upgrades
$Advanced Micro Devices (AMD.US)$ shares climbed to the highest since late 2021 and $NVIDIA (NVDA.US)$'s stock added to this year's rally after the companies and a few other chipmakers received price target boosts from KeyBanc Capital Markets.
$XPeng (XPEV.US)$ will likely face strong competition in the battery-electric-vehicle market in 2024 due to oversupply, Citi analysts say in a research note.
British oil major $Shell (SHEL.US)$ suspended all shipments through the Red Sea indefinitely after U.S. and U.K. strikes on Yemen's Houthi rebels triggered fears of further escalation, according to people familiar with the decision.
Morgan Stanley Earnings Are Hit by One-Time Charges
$Morgan Stanley (MS.US)$ on Tuesday reported fourth-quarter earnings per share of 85 cents, falling short of analysts' estimates for $1.07, as the company took two one-time charges. Net income fell to $1.5 billion from $2.2 billion.
Source: Bloomberg, Dow Jones, CNBC, Reuters
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