Stock market today: Tesla cruises higher as most of Wall Street drifts in mixed trading

NEW YORK —  U.S. stocks drifted to a mixed finish Wednesday as Wall Street’s momentum eased following some sharp swerves.

The S&P 500 was virtually flat and edged up by 1.08, or less than 0.1%, to 5,071.63. It had jumped sharply in the first two days of the week to claw back nearly two-thirds of last week’s steep loss.

The Dow Jones industrial average slipped 42.77, or 0.1%, to 38,460.92, and the Nasdaq composite added 16.11, or 0.1%, to 15,712.75.

Tesla jumped 12.1% after saying the night before that it would accelerate production of new, more affordable vehicles, which investors have been hoping will kick-start growth. The announcement helped investors look past the 55% drop in profit that Tesla reported.

Tesla is the first of the group of stocks known as the “Magnificent Seven” to report its results for the start of 2024. The focus is on the small group of stocks because they drove most of the U.S. stock market’s gain last year, and they’ll need to perform to justify their high prices.

Meta Platforms also reported its latest results after trading ended Wednesday. Alphabet and Microsoft will follow it a day later.

The hope is that profit growth will broaden beyond the Magnificent Seven to more types of companies, in large part because of a remarkably solid U.S. economy. They’ll likely need to deliver fatter profits if they want their stock prices to rise. That’s because they’re unlikely to get much help from the other lever that can lift stock prices: interest rates.

“A strong earnings season looks likely to help restore market confidence,” according to Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management.

Treasury yields were higher in the bond market, raising the pressure on stocks, following the latest report on the U.S. economy to come in hotter than forecast. A string of recent such reports has diminished hopes that the Federal Reserve may deliver the three cuts to interest rates this year that it had earlier signaled.

Wednesday’s report said that orders for machinery, airplanes and other long-lasting manufactured goods were stronger last month than expected. Wall Street is in an awkward place where it wants the economy to avoid a painful recession, but not to be so hot that it keeps upward pressure on inflation and persuades the Fed not to cut rates.

The yield on the 10-year Treasury rose to 4.64% from 4.60% late Tuesday.

On Wall Street, railroad operator Norfolk Southern fell 3.6% after reporting weaker results for the latest quarter than forecast.

Boeing lost 2.9% despite reporting results that weren’t as bad as analysts feared. The company, which is battling criticism about the safety of its airplanes, said it’s taking steps to improve its manufacturing quality, which has slowed down production.

Teledyne Technologies tumbled 10.9% for one of the market’s largest losses after the seller of digital imaging sensors, cameras and other equipment reported weaker profit and revenue than forecast. It said demand from the industrial automation as well as test and measurement markets was weaker than it expected.

On the winning side of the market, Hasbro jumped 11.9% after the toy and game company reported better profit and revenue for the latest quarter than analysts expected. It benefited from growth delivered by its Baldur’s Gate 3 and Magic: The Gathering games, as well as by its Peppa Pig content.

Texas Instruments climbed 5.6% after reporting stronger profit and revenue for the latest quarter than forecast. Boston Scientific was another one of the stronger forces pushing upward on the S&P 500. It rose 5.7% after topping forecasts for profit and revenue.

In stock markets abroad, Japan’s Nikkei 225 jumped 2.4% as the value of the Japanese yen keeps falling against the U.S. dollar. The yen has been trading at its lowest level in 34 years, which gives a boost to Japanese exporters, but also raises speculation about whether Japanese officials will make moves to strengthen their currency.

Stock indexes rose across much of the rest of Asia but dipped modestly in Europe.

Choe writes for the Associated Press