Financial Markets                      01/14 15:19

   

   NEW YORK (AP) -- Most U.S. stocks rose Tuesday following an encouraging 
update on inflation, though drops for Eli Lilly and other influential stocks 
kept indexes in check.

   The S&P 500 rose 0.1% as three out of every four stocks in the index 
climbed. The Dow Jones Industrial Average added 221 points, or 0.5%, and the 
Nasdaq composite slipped 0.2%.

   Stocks got a boost from a report showing inflation at the U.S. wholesale 
level wasn't as high last month as economists expected. It's an encouraging 
signal ahead of a report coming Wednesday, which will show how much inflation 
U.S. consumers faced at gasoline pumps, grocery registers and auto lots in 
December.

   Stubbornly high readings on inflation and a run of better-than-expected 
updates on the U.S. economy have sent Wall Street into a weekslong rut, pulling 
it further from the dozens of all-time highs set last year. The fear is that 
all the strong data will convince the Federal Reserve to deliver less relief 
this year through lower interest rates.

   The Fed has already hinted it's likely to cut rates just two times in 2025, 
down from an earlier projection of four. Speculation is growing about whether 
the Fed may cut rates zero times this year.

   Such questions have sent Treasury yields sharply higher in the bond market, 
which cranks up the pressure on the stock market. Yields slowed their ascent 
following the update on wholesale inflation.

   The yield on the 10-year Treasury held at 4.78%, where it was late Monday. 
It was below 3.65% in September.

   The two-year Treasury yield, which more closely tracks expectations for Fed 
action, eased to 4.36% from 4.39%.

   On Wall Street, KB Home rose 4.8% after delivering a better profit for its 
latest quarter than analysts expected. The rise in Treasury yields has made 
mortgages more expensive, but CEO Jeffrey Mezger said buyers nevertheless 
"continued to demonstrate a desire for homeownership and housing market 
conditions improved relative to last year."

   Mezger said faster build times helped the company deliver more homes in the 
three months through November.

   H&E Equipment Services more than doubled to top $90 after United Rentals 
said it will buy its smaller rival for $92 per share in cash. The deal values 
H&E, which rents aerial work platforms, earthmoving equipment and other 
products, at $4.8 billion, including roughly $1.4 billion of net debt.

   United Rentals rose 5.9%.

   Indexes drifted between gains and losses through the day in large part due 
to drops for several Big Tech stocks. Nvidia fell 1.1% and was the 
second-heaviest weight on the S&P 500.

   The only stock to drag more on the market was Eli Lilly, which fell 6.6% 
after saying it expects to report weaker revenue for the last three months of 
2024 than previously forecast.

   CEO David Ricks said last quarter's 45% growth in Lilly's revenue for its 
Mounjaro diabetes treatment, Zepbound obesity injections and other products in 
the incretin market wasn't as big as expected.

   Also on the losing end of the market was Signet Jewelers, which tumbled 
21.7%. The diamond seller said its sales in the peak shopping days leading up 
to Christmas this past holiday season were below its forecasts. Shoppers were 
focusing on lower-priced fashion gifts "even more than anticipated in a 
continued competitive environment," said Joan Hilson, chief financial and 
operating officer.

   Several of the nation's biggest financial companies will report their latest 
results on Wednesday, including JPMorgan Chase and Wells Fargo, as earnings 
reporting season gears up. Such reports are always under the spotlight, but 
companies may be under more pressure to impress this time around.

   If Treasury yields continue to rise, either stock prices need to fall or 
companies need to produce bigger profit growth to make up for it.

   All told Tuesday, the S&P 500 rose 6.69 points to 5,842.91. The Dow Jones 
Industrial Average gained 221.16 to 42,518.28, and the Nasdaq composite slipped 
43.71 to 19,044.39.

   In stock markets abroad, indexes were higher across much of Europe and Asia 
with a few exceptions.

   Japan's Nikkei 225 index fell 1.8% following a holiday on Monday, but 
indexes were much stronger in China where stocks rose 1.8% in Hong Kong and 
2.5% in Shanghai.

   Crude oil prices fell to give back some of their strong gains in recent 
weeks, which had also been cranking up the pressure on inflation.

   Benchmark U.S. crude eased 1.7% to $77.50 per barrel. Brent crude, the 
international standard, fell 1.3% to $79.92 per barrel.

   ___

   AP Business Writers Yuri Kageyama and Matt Ott contributed.

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