US STOCKS-Wall St mixed with focus on earnings, rate-cut expectations

GE HealthCare Technologies gained 12.4% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by around 1%, to an all-time high. However, Eli Lilly reversed earlier gains to fall 1%, even after forecasting 2024 profit above estimates.

Wall Street's main indexes were mixed in choppy trading on Tuesday, as investors scrutinized earnings at big U.S. companies and digested comments from Federal Reserve policy makers for clues about its first planned interest-rate cut. Minneapolis Fed President Neel Kashkari said the central bank is "not done yet" with inflation although it has come down quickly with three-month and six-month inflation data "basically" at the Fed's 2% goal.

Previously, Cleveland Fed President Loretta Mester

said that if the U.S. economy performs as she expects, this could open the door to rate cuts. She was not ready yet to suggest timing for easier policy. "The market's treading water, recalibrating when the Fed is going to cut rates and how many rate cuts they're going to make," said John Praveen, Managing Director & Co-CIO at Paleo Leon. He also cited comments by Fed Chair Jerome Powell on Sunday, which dashed hopes for a rate cut in March.

Praveen added the central bank may not want to wait too long to cut rates as concerns about small regional Bank NY Community Bancorp put a spotlight on weakness in the commercial real estate industry, which is sensitive to rates. U.S. Treasury Secretary

Janet Yellen said she was concerned about commercial real estate stresses on banks and property owners, but believes the situation is manageable with assistance from bank regulators.

Praveen noted that Powell also referred to commercial real estate on Sunday, and said his and Yellen's comments may have added to investor jitters. "It's having a negative impact on the regional bank sector," he said. The KBW Regional Banking index was down 1.5% as New York Community Bancorp plummeted 17%, stretching a selloff since the lender's surprise quarterly loss last week.

At 2:28 p.m. (1928 GMT)

the Dow Jones Industrial Average rose 38.21 points, or 0.12%, to 38,418.33, the S&P 500 lost 3.70 points, or 0.06 %, to 4,940.02 and the Nasdaq Composite lost 55.40 points, or 0.36 %, to 15,542.28. Airline stocks jumped after Frontier Group Holdings' rose 20% following its surprise break-even earnings. The airline sector's gains aided a roughly 2% advance in the Dow Jones Transport Average.

With over half of S&P 500 companies now having reported earnings, 81.2% surpassed expectations, according to LSEG data. Overall S&P 500 earnings are expected to have risen 8.1% in the fourth quarter from the year-ago quarter. GE HealthCare Technologies gained 12.4% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by around 1%, to an all-time high.

However, Eli Lilly reversed earlier gains to fall 1%, even after forecasting 2024 profit above estimates. The materials index gained 1.8%, as chemicals firm DuPont de Nemours jumped 7% after beating fourth-quarter profit estimates, announcing a new $1 billion share-repurchase program and hiking its dividend.

Weighing on the tech-heavy Nasdaq, the Philadelphia SE Semiconductor index down 1.8% with chip heavyweights Advanced Micro Devices down more than 4% and Nvidia off more than 2%. Rambus Inc was down 19.5% after its quarterly report. Palantir Technologies jumped 29% after forecasting upbeat annual profit.

Advancing issues outnumbered decliners by a 2.2-to-1 ratio on the NYSE. There were 154 new highs and 57 new lows on the NYSE. On the Nasdaq 2,560 issues advanced and 1,576 declined, with advancing issues outnumbering decliners by a 1.6-to-1 ratio. The S&P 500 posted 25 new 52-week highs and 8 new lows while the Nasdaq recorded 95 new highs and 110 new lows.