*
State Street slides on first-quarter profit miss
*
New York factory activity rebounds in April - NY Fed
*
Indexes down: Dow 0.12%, S&P 0.29%, Nasdaq 0.40%
(Updates prices throughout; adds comments)
By Sruthi Shankar and Ankika Biswas
April 17 (Reuters) - U.S. stocks slipped on Monday after
strong data on manufacturing activity in New York state
supported the case for another interest rate increase in May,
while investors awaited more quarterly reports to gauge the
health of corporate America.
State Street Corp's shares sank 11.9% after the
custodian bank's first-quarter profit missed estimates, hurt by
a fall in fee income due to the recent U.S. banking crisis.
Peers Northern Trust Corp and Bank of New York
Mellon Corp shed 4.8% and 6.9%, respectively.
"There were some earnings that weren't great and State
Street was one of those," said Joe Saluzzi, co-manager of
trading at Themis Trading. "The focus shifts from inflationary
worries to what corporate earnings are looking like and how far
of a negative do we have here."
Investors will be on the lookout for reports from major U.S.
banks including Goldman Sachs Group Inc , Bank of America
Corp and Morgan Stanley through the week, after
banking heavyweights including JP Morgan Chase & Co reaped windfalls from higher interest payments last week.
Other big-ticket earnings such as Netflix Inc ,
Tesla Inc and Johnson & Johnson are also
expected this week.
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.
Equity markets were also pressured by a rise in Treasury
yields after the New York Fed said its barometer of
manufacturing activity in the state increased for the first time
in five months in April. 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.
A slew of Fed officials are slated to speak this week, and
investors will scrutinize the comments for new indications on
whether further rate hikes are likely after May.
At 11:38 a.m. ET, the Dow Jones Industrial Average was down 40.72 points, or 0.12%, at 33,845.75, the S&P 500 was down 12.06 points, or 0.29%, at 4,125.58, and the
Nasdaq Composite was down 48.24 points, or 0.40%, at
12,075.23.
Alphabet Inc dropped 3.7% after 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 0.3%.
Prometheus Biosciences Inc rallied 69.2% on Merck &
Co's plans to buy the biotech company for about $10.8
billion.
Charles Schwab Corp gained 3% after the financial
broker's profit beat estimates, helped by rising interest rates.
Advancing issues outnumbered decliners for a 1.04-to-1 ratio
on the NYSE and a 1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and one new low,
while the Nasdaq recorded 54 new highs and 122 new lows.
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
Editing by Shounak Dasgupta)
