*
J.P.Morgan upgrades HP
*
State Street slides after first-quarter profit miss
*
Indexes up: Dow 0.06%, S&P 0.04%, Nasdaq 0.10%
(Updates prices to open)
By Sruthi Shankar and Ankika Biswas
April 17 (Reuters) - Wall Street's main indexes were
little changed on Monday as investors awaited more bank earnings
and views from Federal Reserve policymakers that could provide
cues on when the central bank will pause its monetary
tightening.
Wall Street closed lower on Friday after mixed economic data
appeared to affirm another Fed rate hike in May, dampening
investor enthusiasm after a series of big U.S. bank earnings
launched the first-quarter reporting season.
While banking heavyweights including JP Morgan Chase & Co reaped windfalls from higher interest payments, focus
will be on smaller banks that were at the center of last month's
banking turmoil and forecasts from companies amid recession
worries.
Other major U.S. banks including Goldman Sachs Group Inc , Bank of America Corp and Morgan Stanley will report through the week.
"Regional bank earnings will come in very slightly positive,
while bigger banks will probably post surprisingly positive
results," said Sam Stovall, chief investment strategist at CFRA
Research.
Analysts expect profits at S&P 500 companies to have
declined 4.8% in the first quarter of 2023 from the year-earlier
period, according to Refinitiv data, a slight improvement from
last week's forecast of a 5.2% decline.
"Inflation fire has really been put out, but we're going to
continue to pour water over it until we feel confident that it
is so," Stovall said, adding that people were bracing for a deep
recession that just might not come.
The U.S. central bank is widely seen raising rates by 25
basis points to the 5.00%-5.25% range next month, but recent
economic data signaling a slowing U.S. economy have intensified
debate over whether it will be the last in this cycle.
Traders' bets of a 25-bps hike in May have risen to 85% from
78% last week, according to CME Group's Fedwatch tool.
U.S. Treasury yields touched session highs after data showed
business conditions in New York state unexpectedly bounced back
to expansion territory in April after slumping in the previous
month.
At 9:35 a.m. ET, the Dow Jones Industrial Average was
up 20.85 points, or 0.06%, at 33,907.32, the S&P 500 was
up 1.73 points, or 0.04%, at 4,139.37, and the Nasdaq Composite was up 12.12 points, or 0.10%, at 12,135.58.
Alphabet Inc dropped 2.9%, dragging the
communication services sector index down by nearly 2%,
following a report that Samsung was considering replacing Google
with Microsoft Corp's Bing as the default search engine
on its devices.
Microsoft's shares rose 1.6%, boosting the S&P 500
Information Technology index .
Prometheus Biosciences Inc rallied 69.5% on Merck &
Co's plans to buy the biotech company for about $10.8
billion.
HP Inc gained 4% after the J.P.Morgan upgraded the
stock to "overweight".
State Street Corp fell 15.5% after the custodian
bank reported a weaker-than-expected quarterly profit.
Advancing issues outnumbered decliners for a 1.24-to-1 ratio
on the NYSE and a 1.24-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and one new
low, while the Nasdaq recorded 29 new highs and 55 new lows.
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta)
