NEW YORK โ The S&P 500 threatens to break above the 5,000 level for the first time on Wednesday, as Ford engineChipotle Mexican Grill and other big stocks rise after their latest earnings reports.
The S&P 500 rose 0.9% in late trading to 4,998 and was on track to return to a record high. The Dow Jones Industrial Average rose 189 points, or 0.5%, with just over an hour of trading remaining, and the Nasdaq composite rose 1%.
A relatively quiet day in the bond market helped keep things calm for the stock market, despite some concerns about investors' ability to digest an auction of $42 trillion in 10-year Treasury bonds by the US government on Wednesday.
However, beneath the surface there were still some very rough movements. New York Community Bank it went from an initial gain to a steep 14% loss and back to a 5.4% gain. It's the latest dizzying turnaround for the bank, which is still down nearly 60% since it shook investors across the industry last week with a surprise loss.
It is struggling with challenges related to the acquisition of Signature Bank, which was one of the banks that collapsed in last year's industry mini-crisis. But New York Community Bancorp is also feeling the pain from a problem plaguing banks around the world: weakness in commercial real estate.
Moody's downgraded the bank's credit rating late Wednesday to "junk" status from the lowest level of investment grade. Analysts also said they were concerned about the departures of the bank's top risk and audit executives.
Shares of New York Community Bancorp then soared in after-hours trading, plunging and then rising after the bank said it had increased its deposits and gave details about how much cash it has on hand.
Shares of other regional banks have been caught up in the drama, to a lesser extent, bringing back uncomfortable memories of last year's banking crisis. The KBW Nasdaq Regional Banking Index swung from an intraday loss to a 0.1% gain.
UBS analyst Brody Preston said New York Community Bancorp's latest quarterly losses and dividend cut are due to issues related specifically to it and "are not necessarily a proverbial canary in the coal mine for other banks in the space." ". But potential losses for banks tied to the commercial real estate sector are likely to continue to receive attention, especially after Treasury Secretary Janet Yellen recently flagged them as a concern.
Elsewhere on Wall Street, Chipotle Mexican Grill rose 8.3% after reporting stronger earnings and revenue for the latest quarter than analysts expected. Its restaurants sold more meals to customers than the previous year.
CVS Health gained 2.5% after the same exceeded expectations for both profits and revenue in the last three months of 2023. However, the pharmacy chain and pharmacy benefit manager also cut their full-year results forecast.
Ford Motor rose 5.5% following its better-than-expected results, while Enphase Energy soared 17.9% despite falling just short of forecasts. Investors are hopeful that weak solar and battery system supplier demand is reaching its nadir.
They helped offset a 10.6% drop for VF Corp., the company behind Vans, The North Face and other brands. It reported weaker results than analysts expected.
Snap fell 35.2% after its fourth-quarter revenue missed analyst expectations. The company behind Snapchat also gave a lukewarm forecast for 2024 after saying Monday it was dismissal 10% of your workforce.
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