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Meta rises as report says job cuts imminent
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Rivian slides on plans to sell bonds worth $1.3 bln
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U.S economy to reach technical recession - BofA CEO
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Indexes: Dow off 0.09%, S&P slips 0.04%, Nasdaq up 0.20%
(Updates to market open)
By Sruthi Shankar and Bansari Mayur Kamdar
March 7 (Reuters) - U.S. stock indexes were subdued on
Tuesday in cautious trading ahead of Federal Reserve Chair
Jerome Powell's testimony before Congress that could shed more
light on the central bank's interest rate hike plans.
Powell will testify before the Senate Banking Committee at 10:00 a.m. ET (1500 GMT), with investors awaiting his comments on the Fed's steps aimed at bringing inflation towards its 2% target. Powell said in his last press conference that a "disinflationary process" had begun, while cautioning the central bank's fight against rising prices was not over. Inflation data since his Feb. 1 remarks has shown prices have not fallen by as much as analysts were expecting, while the labor market has shown signs of resilience. "We don't really expect anything new to be shared, he'll (Powell) probably remain hawkish. He'll say that we need to be higher for longer and pretty much everything else we've been hearing so far," said Sam Stovall, chief investment strategist at CFRA Research, New York.
The benchmark S&P 500 closed higher for a third straight session on Monday, as Treasury yields took a breather from their recent rally that was driven by hopes the Fed could hold interest rates at a higher level than many had expected at the start of the year. The yield on two-year Treasury notes , which best reflects short-term rate expectations, hit its highest since 2007 at 4.94% last week and has since been hovering below that level. Higher bond yields tend to weigh on equity valuations, particularly those of growth and technology stocks, as higher rates reduce the value of future cash flows. Recent economic data and comments from Fed policymakers have prompted traders to reassess the path of rates, with money market futures pricing in a 28% chance that the central bank will increase rates by a bigger 50 basis points in March, according to CME Group's Fedwatch tool. Traders see Fed fund rates peaking at 5.46% by September, from the current 4.67%. "The Street is looking for any indication that the Fed will be aiming more towards 6%, and that would be a bigger concern ... 5.5% is pretty much already being weighed by the market," Stovall said. Investors also await data later this week that is expected to show nonfarm payrolls increased by 200,000 in February, compared with the much stronger-than-expected 517,000 jobs reported in January. Denting sentiment, Bank of America Chief Executive Officer Brian Moynihan said the U.S economy would reach a technical recession in the third quarter of 2023. At 9:41 a.m. ET, the Dow Jones Industrial Average was down 28.80 points, or 0.09%, at 33,402.64, the S&P 500 was down 1.44 points, or 0.04%, at 4,046.98, while the Nasdaq Composite was up 23.27 points, or 0.20%, at 11,699.01. Among individual stocks, Rivian Automotive fell 8.8% after the electric automaker unveiled plans to sell bonds worth $1.3 billion. Meta Platforms Inc gained 2.0% after Bloomberg News reported the company will cut thousands of jobs as soon as this week in a fresh round of layoffs. Dick's Sporting Goods rose 7.5% after the retailer forecast annual earnings above Wall Street estimates and more than doubled its quarterly dividend. Declining issues outnumbered advancers for a 1.09-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.05-to-1 ratio on the Nasdaq. The S&P index recorded seven new 52-week highs and one new low, while the Nasdaq recorded 20 new highs and 30 new lows. (Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru Editing by Vinay Dwivedi)
@BansariKamdar;))