Traders work on the floor of the New York Stock Exchange during morning trading on January 17, 2023 in New York City.
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The stock market was divided on Tuesday as investors struggled to continue growth in early 2023 and weighed recent results.
The Dow Jones Industrial Average lost 397 points, or 1.2%, as Goldman Sachs shares fell. The Nasdaq Composite rose 0.1%. The S&P 500 was down 0.2%.
Goldman fell nearly 6% after the bank reported its highest net income in a decade in the fourth quarter. The results were weighed down by a decline in banking and asset management. Meanwhile, peer Morgan Stanley posted better-than-expected numbers thanks in part to a write-off in asset management. Its shares jumped 6%.
The results came after other major banks such as JPMorgan and Citigroup reported mixed quarterly results.
“Goldman and Morgan Stanley are very expensive today following their earnings,” Yung-Yu Ma, a BMO investment analyst, told CNBC. “Even within the financial sector, individual business lines are moving very differently and Morgan Stanley’s asset management division delivered strong returns.”
“This diversity is a sign of what we expect in this investment climate – the diversity of wealth by industry and industry,” he added.
About 7% of S&P 500 stocks reported earnings Tuesday morning, according to FactSet. Of those companies 70% beat expectations. United Airlines will report its quarterly results after the bell.
Wall Street is coming a few weeks in a row to start the new year, but investors can enter the hall of mirrors, according to Mike Wilson, chief US equity strategist at Morgan Stanley.
“The meeting this year has been led by very few things and very short. However, it has been shown a strong movement in the circles that have security. Wilson said.
“Of course, it’s changed a lot, but we also recognize that bear markets have a way of fooling everyone before they’re done,” he said. “We are not complaining about this false/bearish meeting because our work and our methods are sustainable, and we believe in them.”
Dow Jones Industrial Average YTD
Year-to-date, the Nasdaq Composite is up 6%, as investors bought technology stocks that are rising amid expectations of growth in the developing world. The S&P 500 and Dow have advanced about 4% and 2%, respectively, since the start of the year.
The gains came on the back of first-rate inflation data that investors saw as a sign of a contracting economy, with hopes that it would give the Federal Reserve more reason to cut interest rates again. Last week, consumer data for December showed prices stabilized 0.1% from the previous month, but prices were still 6.5% higher than the same month a year ago.