NEW YORK: Wall Street stocks finished mixed on Monday (May 8) ahead of key inflation data as a survey of lenders showed greater caution among banks following recent industry turmoil.
Banks tightened lending standards in the first few months this year, and expect this to continue over the rest of 2023, according to a Federal Reserve (Fed) survey.
Regional banks have been under stress amid worries over deposit flight, on the back of four bank failures since early March.
More cautious lending policies have been seen as a drag on growth.
The Dow Jones Industrial Average fell 55.69 points, or 0.17%, to 33,618.69, the S&P 500 gained 1.87 points, or 0.05%, to 4,138.12 and the Nasdaq Composite added 21.50 points, or 0.18%, to 12,256.92.
For most of the day, stocks struggled for direction amid disappointing earnings from Tyson Foods and Catalent and a short-lived rebound in regional banks.
Shares of Catalent Inc tumbled 25.74% as the contract drug manufacturer saw lower revenue and core profit in 2023, while Tyson Foods tanked 16.41% on a surprise second-quarter loss and a cut in its annual revenue forecast.
The struggle for a clearer direction comes after a rally on Friday, when US jobs data pointed to a resilient labour market.
“Whenever you have a big up day, people need more good news to keep the market up every day in a row,” said portfolio manager Moez Kassam of Anson Funds.
Regional banks gave back most early gains and were mixed at the end of the day.
Western Alliance Bancorporation won 0.7% and PacWest Bancorp climbed 3.7% but KeyCorp and Huntington Bancshares both dropped more than 1%.
Markets are looking ahead to Wednesday’s release of key consumer price data, which will be followed by a reading on wholesale prices the next day. The reports are key inputs on the progress made since the Fed began significantly hiking interest rates more than a year ago in response to inflation.
“The bigger picture is inflation will remain higher for longer and that we are heading into a recession,“ Michael James, managing director of equity trading at Wedbush Securities.
“Whether that’s hard or soft remains to be seen, but until there’s something to disprove that bigger picture thesis, the overall market is going to remain somewhat range bound.” – AFP, Reuters
Source: The Sun Daily
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