Stocks drop ahead of inflation report

Companies’ mixed earnings more broadly aid Wall Street

NEW YORK — Wall Street dipped on Tuesday after some mixed earnings reports, as stocks remain roughly where they have been stuck for more than a month.

The S&P 500 fell 18.95 points, or 0.5 percent, to 4,119.17. The Dow Jones Industrial Average lost 56.88, or 0.2 percent, to 33,561.81, while the Nasdaq composite fell 77.36, or 0.6 percent, to 12,179.55.

This earnings reporting season, which is approaching its final stretch, the majority of companies have been topping forecasts for first-quarter results. That’s because expectations were low over a slowing economy and high interest rates. Companies in the S&P 500 are still on track to report a second straight quarter of weaker profits from year-earlier levels.

“Companies have been able to do pretty well,” said Margie Patel, senior portfolio manager at All spring Global Investments.

The better-than-feared results have given some support to Wall Street even as many other worries are weighing on it.

Key among them is what will happen to the U.S. banking system, which is under stress after three high-profile bank failures since March. Hurt by much higher interest rates, smaller and midsized banks are scrambling to reassure everyone that their deposits are stable and that they aren’t at risk of a sudden exodus of customers.

Stocks of regional banks under the heaviest scrutiny by Wall Street were shaky on Tuesday. Pacwest Bancorp rose 2.3 percent after coming back from an earlier loss. Western Alliance Bancorp dropped 1.4 percent after swinging between losses and gains.

The next big milestone for the market will be Wednesday’s report on inflation at the consumer level. Inflation has come down from its peak last summer, but it’s remaining stubbornly high.

That’s raised uncertainty about what the Federal Reserve’s next move will be.

The central bank has already yanked its benchmark interest rates to a range of 5 percent to 5.25 percent, up from from virtually zero early last year. High rates can undercut inflation, but only by smothering the economy and hurting investment prices.

In the bond market, the 10-year Treasury yield rose to 3.52 percent from 3.51 percent late Monday. The twoyear Treasury yield, which moves more on expectations for the Fed, rose to 4.02 percent from 4 percent.