Wall St up slightly before Fed decision; investors assess earnings

By Sinéad Carew and Amruta Khandekar

(Reuters) – Wall Street’s main indexes rose on Tuesday afternoon after a choppy morning, as investors looked ahead to the Federal Reserve’s monetary policy update while they digested the latest batch of earnings reports.

The Fed kicked off a two-day monetary policy meeting at which the central bank is widely expected to hold interest rates steady. Investors will monitor Fed Chair Jerome Powell’s comments for clues about its future plans.

While some investors awaited the Fed update, others reacted to disappointing earnings report and showed jitters over geopolitics.

Heavy-machinery maker Caterpillar (NYSE:) fell 6% as signs of slowing machinery demand overshadowed a quarterly earnings beat. Drugmaker Amgen (NASDAQ:) fell 4% as third-quarter sales of some high-profile medicines came in below expectations.

“Today’s move back into positive territory is on the growing consensus the Fed is more likely to hold off on any more rate hikes this year,” said Greg Bassuk, chief executive of AXS Investments in New York.

Bassuk also pointed to mixed earnings reports and companies that are “messaging concerns about upcoming quarters with energy prices rising and increasing uncertainty” around wars in Israel and Ukraine that are “showing no end in sight.”

“The up and down market activity is reflective of investors up and down sentiment,” he said.

The rose 42.72 points, or 0.13%, to 32,971.68, the gained 15.01 points, or 0.36%, to 4,181.83 and the added 21.30 points, or 0.17%, to 12,810.78.

Nine of the 11 major S&P 500 sectors were advancing, with real estate up 1.6% and leading gains, while the biggest loser, communication services, was down 0.3%.

All three indexes were headed for their third straight month of losses.

Nvidia (NASDAQ:) was down 1.7% after a report said the latest U.S. curbs could force the chip designer to cancel billions of dollars of orders to China.

Earlier, data showing a solid increase in U.S. labor costs in the third quarter prompted some concerns that the Fed could keep interest rates higher for longer.

Of the 279 companies in the S&P 500 that have reported earnings to date, over 78% have beaten analyst estimates, per LSEG data. Analyst expect earnings growth of 4.9% for S&P 500 companies in the third quarter.

Pinterest (NYSE:) was up 18.8% as the image-sharing platform beat third-quarter revenue and profit estimates.

VF Corp (NYSE:) dropped 14.9% after the Vans sneaker maker withdrew its annual forecast. Arista Networks (NYSE:) gained 14.4% on an upbeat fourth-quarter revenue outlook.

Sarepta Therapeutics (NASDAQ:) was down 38.3% on the failure of its muscle disorder gene therapy in a late-stage trial. Shares of Sarepta’s client, Catalent (NYSE:), also fell 15.9%.

Advancing issues outnumbered declining ones on the NYSE by a 1.91-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored advancers.

The S&P 500 posted 1 new 52-week highs and 15 new lows while the Nasdaq Composite recorded 13 new highs and 230 new lows.