Stocks open mostly higher as earnings reports stream in

NEW YORK (AP) — Stocks are mostly higher in early trading on Wall Street as a deluge of major corporate earnings poured in ahead of Wednesday’s Federal Reserve interest rate meeting. The S&P 500 was up 0.2% in the first few minutes of trading Tuesday and the the Dow Jones Industrial Average slipped 0.1%. The Nasdaq composite was up 0.5%. Markets have been veering recently on worries that the economy and corporate profits may be set for a steep drop-off, along with competing hopes that cooling inflation will get the Federal Reserve to take it easier on interest rates.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street pared some steeper losses but markets were still down in premarket trading Tuesday as a deluge of major corporate earnings poured in ahead of Wednesday’s Federal Reserve interest rate meeting.

Futures for the Dow Jones industrials fell 0.4% and futures for the S&P 500 were down 0.3% before the bell.

Markets have been veering recently on worries that the economy and corporate profits may be set for a steep drop-off, along with competing hopes that cooling inflation will get the Federal Reserve to take it easier on interest rates.

Most investors expect the Fed to announce a rate hike of just 0.25 percentage points. That would be the smallest increase since March, following a spate of hikes of 0.75 points and then a 0.50-point increase, and it would mean less pressure on the economy.

Higher rates combat inflation by intentionally slowing the economy, while also dragging down on prices for investments. Inflation has been cooling since the summer amid last year’s blizzard of rate hikes, but the economy has also been showing signs of concern.

Central banks for Europe and for the United Kingdom are also set to announce their latest increases for rates this week.

Beyond interest rates, more than 100 companies in the S&P 500 are scheduled this week to report how much profit they made in the last three months of 2022. Among them are tech heavyweights Apple, Amazon, and Google’s parent company Alphabet.

Exxon shares rose about 1% before the bell Tuesday after the energy giant reported record annual profit but lower than forecast fourth-quarter sales.

General Motors jumped more than 5% as the automaker easily topped Wall Street profit forecasts, while McDonald’s shares slipped 2.4% as the fast food chain beat forecasts, though overseas revenue was weaker because of the strong dollar.

In Europe, London’s FTSE 500 slid 0.7%, Germany’s DAX slipped 0.5% and France’s CAC 40 was down 0.4%.

In a positive sign, the IMF said the global outlook has grown slightly brighter as China eases its zero-COVID policies and economies show surprising resilience in the face of high inflation, elevated interest rates and Russia’s ongoing war against Ukraine.

Meanwhile, a survey released Tuesday showed Chinese factory activity rebounded in January, adding to signs the world’s second-largest economy might be recovering from a painful slump.

Japan’s benchmark Nikkei 225 fell 0.4% to finish at 27,327.11. Australia’s S&P/ASX 200 edged down nearly 0.1% to 7,476.70. South Korea’s Kospi declined 1.0% to 2,425.08. Hong Kong’s Hang Seng lost 1.0% to 21,839.64, while the Shanghai Composite shed 0.4% to 3,255.67.

“China’s rapid reopening has boosted its domestic growth outlook, Europe’s mild weather has sharply reduced its recession risk, and a string of better inflation news has increased hopes that the Fed may be able to engineer a ‘soft landing’ in the U.S.,” said Stephen Innes, managing partner at SPI Asset Management.

“Despite these shifts, U.S. recession risk remains a major worry and may be the most significant risk to the global cyclical picture,” he said.

Later this week, the U.S. government will also give its latest monthly update on the job market. Hiring has remained resilient across the broad economy, even as housing and other corners weaken sharply under the weight of all the Fed’s rate hikes from last year.

Economists expect Friday’s report to show that U.S. employers added 187,500 more jobs than they cut during January. That would be a slowdown from December’s hiring of 223,000.

In energy trading, benchmark U.S. crude fell 72 cents to $77.18 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.78 on Monday to $77.90 per barrel.

Brent crude, the international standard, shed 67 cents to $83.83 per barrel.

In currency trading, the U.S. dollar was unchanged at 130.44 Japanese yen. The euro cost $1.0832, down from $1.0852.

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Kageyama reported from Tokyo; Ott reported from Washington.