Stock market today: Wall Street drifts lower as momentum slows for US stocks

NEW YORK (AP) — U.S. stock indexes drifted lower Thursday following a mixed set of earnings reports from Morgan Stanley, UnitedHealth Group and other big companies.

The S&P 500 slipped 0.2% after flipping between small gains and losses through the day. More stocks rose within the index than fell, but drops for some influential stocks like Tesla outweighed them.

The Dow Jones Industrial Average dropped 68 points, or 0.2%, and the Nasdaq composite fell 0.9%.

The relatively modest moves for stocks came a day after they shot higher on hopes that an encouraging report on inflation may convince the Federal Reserve to deliver more cuts to interest rates this year. Treasury yields were also more placid in the bond market following mixed economic reports on Thursday.

One report showed growth for sales at U.S. retailers wasn’t as strong last month as economists expected. Another said more U.S. workers filed for unemployment benefits last week, and a third said manufacturing in the mid-Atlantic area unexpectedly roared back to growth.

Taken together, the trio of reports suggests the U.S. economy is nowhere near a recession but may be showing some signs of slowing that could keep pressure off inflation. Markets have been lurching down and up in recent weeks as economic reports force traders to revamp their expectations about what the Federal Reserve may do with interest rates in 2025.

When reports have calmed worries about inflation, expectations have climbed for possible cuts to rates. That has typically sent Treasury yields lower and stock prices higher. When inflation looks to be a bigger problem, whether through a still-solid economy or possible policies coming from President-elect Donald Trump, Treasury yields have climbed, and stock prices have tended to sink.

On Thursday, yields eased modestly. The yield on the 10-year Treasury fell to 4.61% from 4.66% late Wednesday and from 4.79% on Tuesday.

The two-year Treasury yield, which more closely follows expectations for the Fed’s upcoming moves, slipped to 4.23% from 4.27% late Wednesday and from 4.37% two days ago.

Treasury yields are still higher than they were last autumn, though. And higher yields can put downward pressure on stock prices, unless companies deliver higher profits to make up for it.

On Wall Street, Morgan Stanley climbed 4% after reporting stronger earnings for the latest quarter than analysts expected. CEO Ted Pick said investment banking improved in the quarter. Strong financial markets also helped its total client assets grow to $7.9 trillion across its wealth and investment management businesses.

It followed stronger-than-expected profit reports from a bevy of banks the day before, including Citigroup, Goldman Sachs and Wells Fargo.

Bank of America also delivered a profit report on Thursday that beat expectations, but its stock was more subdued. It fell 1%.

U.S. Bancorp, meanwhile, fell to one of the worst losses in the S&P 500 after reporting results for the latest quarter that fell short of analysts’ expectations. It dropped 5.6%.

The only stock to lose more in the index was UnitedHealth Group, which tumbled 6%. The insurer reported a stronger profit than expected, but its revenue for the latest quarter came up shy of forecasts. A rise in medical costs surprised analysts.

It was the company’s first financial report since the shooting of one of its executives outside a New York City hotel early last month.

Another weight on the market was Tesla, which fell 3.4% on news it is offering discounts on its Cybertruck, the latest sign that Elon Musk’s company is struggling to attract buyers as sales of its electric vehicle models drop for the first time in a dozen years.

All told, the S&P 500 slipped 12.57 points to 5,937.34. The Dow dipped 68.42 to 43,153.13, and the Nasdaq composite sank 172.94 to 19,338.29.

In stock markets abroad, indexes rose across much of Europe and Asia. France’s CAC 40 jumped 2.1%, South Korea’s Kospi gained 1.2% and Hong Kong’s Hang Seng rose 1.2% for some of the bigger gains.

Taiwan computer chip maker Taiwan Semiconductor reported Thursday that its profit in the last quarter jumped 57%. The world’s biggest semiconductor manufacturer — which has found itself in the middle of a trade and technology rift between the U.S. and China — said it results were propelled by the artificial intelligence boom.

Its stock that trades in the United States rose 3.9%.

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AP Business Writers Yuri Kageyama, Matt Ott and Bernard Condon contributed.