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March CPI data due on Wednesday
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Fed's Goolsbee calls for rate-hike caution
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CarMax rallies on quarterly profit beat
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Crypto stocks climb as bitcoin breaches $30k level
(Updates to market close)
By Stephen Culp
NEW YORK, April 11 (Reuters) - Wall Street stocks ended
mixed on Tuesday, losing steam late in the session as investors
awaited crucial inflation data and the unofficial kick-off of
first-quarter reporting season.
The Dow closed in positive territory with
economically sensitive sectors such as industrials ,
materials and transports providing a boost. The
S&P 500 ended essentially unchanged, and the Nasdaq ended lower.
"When you see cyclicals leading, that is saying that
recession worries could be somewhat overblown," said Ryan
Detrick, chief market strategist at Carson Group in Omaha.
"That's a healthy sign, what you wouldn't expect to see if we
were headed straight for recession."
Stocks briefly gained momentum in the afternoon as Chicago
Fed President Austan Goolsbee urged caution, warning that the
Federal Reserve needs to be careful about raising rates too
aggressively in its efforts to tame inflation.
With a lack of market moving catalysts, investors looked
ahead to Wednesday's consumer price index (CPI) for any evidence
that the long, slow inflation cooldown continues.
"It's the calm before the storm," Detrick added. "With
huge inflation data tomorrow, Fed minutes coming out soon and
earnings right around the corner, traders are taking a wait and
see approach to see how the inflation data comes in."
On a monthly basis, analysts see headline and core CPI cooling to 0.2% and 0.4%, respectively. But year-on-year, while consensus estimates call for a significant drop in the headline number - to 5.2% from 6.0% - the core measure, which strips out volatile food and energy prices, is expected to gain heat, rising to 5.6% from 5.5%. As inflation slowly cools to the Fed's average annual 2% target, market participants are banking on a 70% likelihood of another 25 basis point interest rate hike at the conclusion of its May monetary policy meeting, according to CME's FedWatch tool. "(The) 25 basis point hike is probably going to happen, and is baked into stock prices," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "How they position it for the next meeting is key, because so many people are expecting a downturn in the economy." Beyond CPI, investors are eyeing first-quarter reporting season, which surges from the starting gate this Friday with results from three major banks, Citigroup Inc , JPMorgan Chase & Co and Wells Fargo & Co . Analysts expect aggregate first-quarter S&P 500 earnings falling 5.2% year-on-year, a stark reversal from the 1.4% annual growth seen at the beginning of the quarter. According to preliminary data, the S&P 500 gained 0.02 points, or 0.00%, to end at 4,109.14 points, while the Nasdaq Composite lost 51.92 points, or 0.43%, to 12,032.44. The Dow Jones Industrial Average rose 100.97 points, or 0.30%, to 33,686.64. Cryptocurrency-related shares such as Coinbase Global Inc , Riot Platforms Inc and Marathon Digital Holdings Inc surged as bitcoin broke through the $30,000 level for the first time in 10 months. CarMax Inc jumped after the used-car retailer posted a consensus-beating quarterly profit. Drugmaker Moderna Inc slipped after the company said its closely watched flu vaccine failed to meet the criteria for "early success" in a late-stage trial. (Reporting by Stephen Culp; Additional reporting by Sruthi Shankar and Ankika Biswas in Bengaluru and Richard Chang)
