By DAMIAN J. TROISE, Associated Press Business Writer
NEW YORK (AP) — Stocks are slipping in morning trading Thursday as investors pore over another batch of earnings reports from U.S. companies.
The S&P 500 slipped 0.4%. The Dow Jones Industrial Average fell 185 points, or 0.4%, as of 10:25 a.m. Eastern time. The Nasdaq composite fell 0.7%.
Corporate earnings and forecasts have been the big focus all week. The latest round of results and statements from executives could help shed some light on the condition and path ahead for the economy amid a lack of broader information on inflation, employment and retail sales because of the ongoing government shutdown.
DoorDash sank 14% for one of the sharpest drops on Wall Street. The food delivery app warned investors that it will be spending significantly more on product development next year.
Software company Datadog jumped 22.4% after its latest earnings beat analysts’ forecasts. Rockwell Automation rose 5.7% after turning in results that easily beat analysts’ forecasts.
It has been a wobbly week for major indexes, which set record highs last week. The broader stock market has had a record-setting year, but that has raised worries that stocks could be overvalued. Those concerns are even more focused on big technology companies that have been leading the market higher amid the focus on artificial intelligence advancements.
The latest round of earnings is being closely monitored to gauge whether the stock market’s big values are justified. The results are also helping to fill in gaps in information because of the U.S. government shutdown, which is now the longest on record.
Another week of unemployment data was missing Thursday because of the shutdown. It has already resulted in a lack of monthly employment data for September and will likely result in missing employment data for October, along with a lack of data on consumer prices for October.
The absence of updates on the job market and inflation has left the Federal Reserve in the dark at the same time that employment was weakening and inflation heating up. That leaves the central bank in a tough spot. It has to decide whether cutting its benchmark interest rate to counter the economic impact from a weaker job market is worth the risk of worsening inflation.
Lower interest rates can help stimulate the economy by making loans less expensive, but they can also fuel inflation.
The Fed has already cut its benchmark interest rate twice this year. It has signaled more caution as it tries to navigate the risks to the economy. Wall Street is forecasting a 69% chance that the central bank cuts interest rates in December, according to CME FedWatch. That’s down from more than 90% just prior to the most recent interest rate cut.
European markets edged lower after a divided Bank of England kept its main interest rate unchanged. Asian markets closed higher.
Treasury yields moved lower in the bond market. The yield on the 10-year Treasury fell to 4.09% from 4.16% late Wednesday. The yield on the two-year Treasury fell to 3.57% from 3.63% late Wednesday.