US Stocks Give Back Some Recent Gains  02/08 15:52

   Stocks fell on Wall Street Wednesday, giving back some of their recent gains 
as uncertainty about interest rates and inflation continues to reign.

   NEW YORK (AP) -- Stocks fell on Wall Street Wednesday, giving back some of 
their recent gains as uncertainty about interest rates and inflation continues 
to reign.

   Investors also reviewed another set of mixed earnings reports from big 
companies. The latest round of financial results and forecasts could help give 
Wall Street a clearer picture of how inflation is shaping consumer spending and 
business plans.

   The S&P 500 fell 46.14 points, or 1.1%, to 4,117.86 and is now on track for 
weekly losses after a few days of choppy trading. The Dow Jones Industrial 
Average fell 207.68 points, or 0.6%, at 33,949.01. The Nasdaq composite fell 
203.27 points, or 1.7%. to 11,910.52.

   The pullback follows Tuesday's gain of 1.3% for the S&P 500, which came 
after the first public comments by Federal Reserve Chair Jerome Powell since 
the central bank raised interest rates last week. Markets found some solace in 
Powell's signaling that Friday's exceptionally strong jobs report wouldn't by 
itself push the Fed to get more aggressive on interest rates.

   But analysts pointed out that Powell's comments were just as tough on 
inflation as before. He said that while he has seen improvements in inflation, 
the road ahead is still long to get it fully under control. The Fed can help 
drive down inflation by raising interest rates and keeping them high, but that 
also raises the risk of a deep recession and hurts investment prices in the 
meantime.

   The Fed has been saying that it plans to hike interest rates a couple more 
times and then hold them at a high level at least through the end of the year. 
Wall Street moved its forecast for how high rates will go by the summer closer 
to the Fed's following Friday's blockbuster report showing much stronger job 
growth than expected, which could raise the pressure on inflation. But 
investors are still betting on the possibility of a cut to rates late this year.

   "We've got this kind of push and pull going on that's generating a lot of 
volatility," said Brad McMillan, chief investment officer for Commonwealth 
Financial Network.

   John Williams, the president of the Federal Reserve Bank of New York, said 
he still thinks the Fed's main interest rate hitting a target of 5% to 5.5% by 
the end of the year is "a very reasonable view," even after Friday's 
exceptionally strong jobs report. With the federal funds rate currently sitting 
in a range of 4.50% to 4.75%, that would be in line with expectations for two 
more increases before a pause. He spoke at a CFO Network summit hosted by the 
Wall Street Journal.

   But Williams also warned that interest rates may need to go higher if stock 
prices rally and bond yields fall too much, among other loosening financial 
conditions, because that could drive inflation higher.

   Uncertainty about where inflation and interest rates are heading has been at 
the center of Wall Street's big swings for the last year. So have shifting 
expectations for the economy to fall into a deep recession, which would kneecap 
corporate profits.

   Companies have so far been reporting relatively lackluster earnings for the 
last three months of 2022, as rising costs eat into their margins.

   "It sounds like companies are starting to prepare for a tougher economy 
going forward," McMillan said. "There's a real sense out there that things 
going forward are likely going to be worse than they are now."

   Chipotle Mexican Grill fell 5% after it reported weaker profit and revenue 
for the latest quarter than Wall Street expected.

   Jack Henry & Associates, a company in the financial technology industry, 
sank 9.3% for one of the biggest drops in the S&P 500 after it reported weaker 
results than expected and trimmed financial forecasts for the full fiscal year.

   Lumen Technologies tumbled 20.8% despite reporting stronger results than 
expected. Its forecasts for some financial measures in 2023 fell short of 
analysts' expectations.

   On the winning side was CVS Health, which gained 3.5% after topping Wall 
Street's forecasts for revenue and profit. It also said it would buy Oak Street 
Health, a primary care company, in a deal it valued at about $10.6 billion.

   Entertainment giant Walt Disney rose 1.8% in afterhours trading after it 
reported surprisingly good fiscal first-quarter financial results.

   In the bond market, Treasury yields were holding relatively steady after 
zooming higher in recent days on expectations for a firmer Fed.

   The yield on the 10-year Treasury, which helps set rates for mortgages and 
other important loans, slipped to 3.62% from 3.68% late Tuesday. The two-year 
yield, which moves more on expectations for the Fed, dipped to 4.43% from 4.47%.

   In stock markets abroad, trading on Istanbul's exchange was suspended after 
the market benchmark sank more than 7% as Turkey struggled with the aftermath 
of a magnitude 7.8 earthquake that has killed more than 9,500 people. It was 
unclear when trading would resume.