On Wall Street, KB Home rose 4.8 per cent after delivering a better profit for its latest quarter than analysts expected. The rise in Treasury yields has made mortgages more expensive, but CEO Jeffrey Mezger said buyers nevertheless “continued to demonstrate a desire for homeownership and housing market conditions improved relative to last year.”
Mezger said faster build times helped the company deliver more homes in the three months through November.
H&E Equipment Services more than doubled to top $US90 after United Rentals said it will buy its smaller rival for $US92 per share in cash. The deal values H&E, which rents aerial work platforms, earthmoving equipment and other products, at $US4.8 billion, including roughly $US1.4 billion of net debt.
United Rentals rose 5.9 per cent.
Indexes drifted between gains and losses through the day in large part due to drops for several Big Tech stocks. Nvidia fell 1.1 per cent and was the second-heaviest weight on the S&P 500.
The only stock to drag more on the market was Eli Lilly, which fell 6.6 per cent after saying it expects to report weaker revenue for the last three months of 2024 than previously forecast.
CEO David Ricks said last quarter’s 45 per cent growth in Lilly’s revenue for its Mounjaro diabetes treatment, Zepbound obesity injections and other products in the incretin market wasn’t as big as expected.
Also on the losing end of the market was Signet Jewelers, which tumbled 21.7 per cent. The diamond seller said its sales in the peak shopping days leading up to Christmas this past holiday season were below its forecasts. Shoppers were focusing on lower-priced fashion gifts “even more than anticipated in a continued competitive environment,” said Joan Hilson, chief financial and operating officer.
Several of the nation’s biggest financial companies will report their latest results on Wednesday, including JPMorgan Chase and Wells Fargo, as earnings reporting season gears up. Such reports are always under the spotlight, but companies may be under more pressure to impress this time around.
If Treasury yields continue to rise, either stock prices need to fall or companies need to produce bigger profit growth to make up for it.
All told Tuesday, the S&P 500 rose 6.69 points to 5,842.91. The Dow Jones gained 221.16 to 42,518.28, and the Nasdaq composite slipped 43.71 to 19,044.39.
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In stock markets abroad, indexes were higher across much of Europe and Asia with a few exceptions.
Japan’s Nikkei 225 index fell 1.8 per cent following a holiday on Monday, but indexes were much stronger in China where stocks rose 1.8 per cent in Hong Kong and 2.5 per cent in Shanghai.
Crude oil prices fell to give back some of their strong gains in recent weeks, which had also been cranking up the pressure on inflation.
Benchmark US crude eased 1.7 per cent to $US77.50 per barrel. Brent crude, the international standard, fell 1.3 per cent to $US79.92 per barrel.
AP
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