# Dow drifts despite good earnings as investors await tech heavyweight results

What’s driving the market?

Corporate results for the first quarter were in the spotlight as one of the busiest weeks of the earnings reporting season got under way, with electric car maker Tesla Inc.
TSLA,
-4.19%
delivering its report late Monday afternoon. Tech results will be in the spotlight, with earnings for Microsoft Corp.
MSFT,
+0.13%
and Google parent Alphabet Inc.
GOOG,
-0.84%

GOOGL,
-0.92%
due after the closing bell Tuesday.

With about a third of S&P 500 index companies reporting so far, about 80% have beaten forecasts, according to FactSet.

But the strong results have not spurred big gains in equities as investors had largely priced in the rapid growth in profits. Rather, companies that showed they were capitalizing on the economic reopening and long-term changes in consumer behavior would benefit the most, said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

“We’ve reached a challenging part of the cycle, where strong reports are going to head-to-head with even stronger expectations. The message for investors is that a rising tide isn’t likely to raise all ships moving forward,” said Goodwin.

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The Federal Reserve on Tuesday started its two-day policy meeting at which Fed Chairman Jerome Powell is expected to maintain his stance that interest rates won’t begin to rise until inflation exceeds the Fed’s 2% target.

Investors don’t expect the central bank to offer more substance on future plans to taper asset purchases, and to underline that the recovery still was in its early stages.

“Wall Street seems fixated on pricing pressures, especially after many corporate updates discuss supply chain problems and with rising expectations to pass on costs to customers,” Edward Moya, Senior Market Analyst, The Americas, at OANDA  wrote in a note Tuesday. “The overwhelming consensus is that pricing pressures will peak during the summer and if the Fed can hold onto that belief, a near zero interest rate environment might need to be priced much longer than what investors are currently thinking. ”  

Read: Why the Fed’s focus on those hardest-hit by the pandemic matters for markets

In U.S economic data, the Case-Shiller 20-city home price index jumped 11.9% in February from a year ago, the biggest increase in 15 years.

The Conference Board said its index of consumer confidence climbed to a 14-month high of 121.7 in April from a revised 109 in March.

Which companies are in focus?

• Tesla shares were down more than 4% after the Silicon Valley electric-car maker reported first-quarter profit above expectations, but saw sales miss the mark slightly.

• Shares of Lyft Inc.
  LYFT,
  -0.38%
  were up 0.5% after the ride-hailing company late Monday said it would sell its autonomous-vehicle division to a Toyota 
  TM,
  -0.39%
  subsidiary for $550 million in cash, calling the move a way to speed up the development of self-driving technology.

• Shares of meme favorite GameStop Corp.
  GME,
  +5.75%
  rose 6% after the videogame retailer announced after Monday’s closing bell that it had completed its “at-the-market” stock offering by selling 3.5 million additional shares for approximately $551 million.

• Shares of drugmaker Eli Lilly & Co.
  LLY,
  -2.68%
  were down over 2% after the company posted weaker-than-expected first-quarter earnings and provided guidance that was below consensus.

• United Parcel Service Inc.
  UPS,
  +11.20%
  shares jumped over 11% after the package delivery giant reported first-quarter profit and revenue that were well above expectations. Shares of Fedex Corp.
  FDX,
  +4.55%
  also rose.

• Shares of Dow component 3M Co.
  MMM,
  -2.51%
  fell 2.4% after the conglomerate reported first-quarter earnings and revenue that beat forecasts and affirmed its full-year outlook.

• General Electric Co.
  GE,
  -1.14%
  shares declined 1.9% after the industrial conglomerate swung to a first-quarter loss, but reported adjusted profit that topped expectations while revenue fell short of expectations.

• Hasbro Inc.
  HAS,
  +1.74%
  shares were up 2.2% after the toy maker reported earnings that topped forecasts, while revenues fell short.

• Shares of Archer Daniels Midland Co.
  ADM,
  +3.37%
  shares were 3.5% higher after the food-processing company topped earnings and revenue expectations for its first quarter. 

What are other markets doing?

• The yield on the 10-year Treasury note
  BX:TMUBMUSD10Y
  rose 5 basis points to around 1.62%%. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index
  DXY,
  +0.11%,
  a measure of the currency against a basket of six major rivals, edged up 0.1%.

• Oil futures remained higher as reports said OPEC+ would cancel a Wednesday meeting and stick with a timetable to ease production curbs, with the U.S. benchmark
  CL00,
  +1.79%
  rising $1.03, or 1.7%, to settle at $62.94 a barrel on the New York Mercantile Exchange. Gold futures
  GC00,
  -0.22%
  fell $1.30, or nearly 0.1%, to settle at $1,778.80 an ounce.

• In global equity trading, the Stoxx 600 Europe index
  SXXP,
  -0.08%
  fell 0.2% and London’s FTSE 100 index
  UKX,
  -0.26%
  was off 0.3%. The Shanghai Composite
  SHCOMP,
  +0.04%
  ended fractionally higher, while Hong Kong’s Hang Seng Index
  HSI,
  -0.04%
  fell slightly and Japan’s Nikkei 225
  NIK,
  -0.46%
  fell 0.5%.