NEW YORK (AP) — Stocks on Wall Street edged higher Wednesday as the focus swings back toward how much profit businesses are making.The S&P 500 rose 0.3% in afternoon trading. The Dow Jones Industrial Average was up 274 points, or 0.6%, as of 2:25 p.m. Eastern time, and the Nasdaq composite was mostly unchanged.Several big technology stocks fell and checked broader gains in the market.Alphabet sank 7.5% even though Google’s parent company reported stronger profit for the latest quarter than analysts expected. Investors focused instead on slowing growth for its cloud business, whose revenue fell short of forecasts. They also homed in on the $75 billion Alphabet is budgeting for investments this year, roughly $15 billion more than analysts expected, as it remains in the rush to develop artificial-intelligence technology.Pressure is growing on Alphabet from Wall Street, and “investors will be asking what new products will be emerging to warrant the higher level of investment,” according to UBS analysts led by Stephen Ju.Advanced Micro Devices fell 7.6% even though the chip company edged past profit expectations for the latest quarter. It also felt the pain of high expectations. AMD gave a forecasted range for revenue in the first three months of 2025 whose midpoint suggested growth of 30% from a year earlier, but that wasn’t as strong as analysts expected.While analysts called AMD’s results solid, they also asked why CEO Lisa Su did not give more detail about expectations for the performance of its AI offerings specifically.Toymaker Mattel jumped 15.2% after blowing past analysts’ forecasts for profit in the latest quarter. Strength for its Hot Wheels brand helped make up for some softness for Barbie and other dolls. Mattel also gave a forecast for profit this upcoming year that topped analysts’ expectations.Investors always want companies to deliver bigger profits, but the hopes may be even higher than usual given worries about how much faster stock prices have climbed than corporate profits, leaving them looking more expensive. Uncertainty is also hanging over the global economy because of President Donald Trump’s tariffs.After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. That bolstered traders’ hopes that Trump sees tariffs as merely a tool for negotiation, rather than as a long-term policy.Goldman Sachs economist David Mericle says a further extension may happen, but he sees the tariff risk for both countries likely remaining until the end of a review of the United States’ existing trade agreement with the two countries, which could be in the middle of next year.In the meantime, Trump has pressed ahead with tariffs on Chinese goods, and Mericle expects tariffs to hit autos from the European Union, among other potential moves. That could drive a one-time
Gio. Feb 6th, 2025
