S&P 500 Ends Tuesday Little Changed as Earnings Season Picks Up Steam: Live Updates

S&P 500 Ends Tuesday Little Changed as Earnings Season Picks Up Steam: Live Updates
CNBC

The S&P 500 finished little changed Tuesday as traders digested a slew of earnings reports and their implications for the U.S. economy.

The broad market index edged up 0.09% to end at 4,154.87, while the Dow Jones Industrial Average dipped 10.55 points, or 0.03%, to close at 33,976.63. The Nasdaq Composite inched down 0.04% to settle at 12,153.41.

Major benchmarks fluctuated as investors assessed the latest batch of key earnings reports. Despite a tough economic environment, Bank of America surpassed first-quarter expectations{

Bank of America gains on earnings beat

Shares of Bank of America rose 3% before the bell after the banking giant topped earnings expectations on both the top and bottom lines as interest rates rose.

The bank reported first-quarter earnings of 94 cents a share on $26.39 billion in revenue. That beat expectations of EPS of 82 cents on $25.13 billion in revenue, according to Refinitiv estimates.

Higher interest rates helped boost Bank of America's net interest income by 25% to $14.4 billion in the period.

— Samantha Subin, Yun Li

as rates rose Johnson & Johnson beat estimates

Elsewhere, Goldman Sachs shares slumped 1.7% after the banking giant reported lighter-than-expected revenue, dragged down by a $470 million hit from its Marcus loans{

Goldman's sale of Marcus loans hit revenue, but it boosted earnings, Mike Mayo says

Mike Mayo, Wells Fargo Securities
Scott Mlyn | CNBC
Mike Mayo, Wells Fargo Securities

Goldman Sachs' mixed quarter shows a lingering hangover from its ill-fated foray into consumer banking.

The company, in unwinding its consumer efforts, offloaded a chunk of its Marcus consumer loans, resulting in a $470 million revenue hit that drove its topline miss.

But the move boosted quarterly earnings by a whopping $1.20 per share because it allowed the bank to release $440 million in reserves for loan losses, Mike Mayo of Wells Fargo said Tuesday in a research note.

So its not surprising that while profit of $8.79 a share topped the $8.10 Refinitiv estimate, shares of the bank were last down 2%.

—Hugh Son

Despite Tuesday's moves, and expectations for declining profits against a backdrop of persistent inflation and rising interest rates, earnings season has so far proven resilient. All the major averages are up since the period kicked off.

But investors warn that profits topping already low expectations won't matter to a market staring at a Federal Reserve that's continuing to tighten into a potential recession.

"Today's mood is about profitability concerns [which] may have been overdone for the quarter, but Fed tightening fears won't be going away anytime soon," said Ed Moya, senior market analyst at Oanda. 

Even after last month's dual bank failures sent shockwaves across the financial sector, more than 8 out of 10 of traders anticipate a 25 basis point increase next month, according to CME Group's FedWatch tool. It marks a stark contrast to the calls for a halt in hiking in March.

As another central bank policy meeting looms on the horizon, Atlanta Federal Reserve President Raphael Bostic told CNBC's "Squawk on the Street" on Tuesday that he anticipates one more 25 basis point hike, followed by a hold at that level "for quite some time."

"One more move should be enough for us to then take a step back and see how our policy is flowing through the economy, to understand the extent to which inflation is returning back to our target," he said.

Earnings season presses on after the bell with results from United Airlines and streaming giant Netflix.

Lea la cobertura del mercado de hoy en español aquí.

Major averages finish little changed

The major averages finished close to the flatline on Tuesday.

The S&P edged up 0.09% to end at 4,154.87, while the Dow Jones Industrial Average dipped 10.55 points, or 0.03%, to close at 33,976.63. The Nasdaq Composite inched down 0.04% to settle at 12,153.41.

— Samantha Subin

Schwab may be a wait-and-see story for bulls and bears

Schwab's earnings per share topped expectations for the first quarter on Monday, but analysts are mostly sticking with their prior views on the brokerage firm as they wait to see when and how Schwab's deposits rebound from the regional bank crisis.

Goldman Sachs analyst Alexander Blostein wrote in a note to clients that Schwab now has "a longer road to recovery" but maintained an overweight rating on the stock.

"Although SCHW's significant deposit outflows have pushed out the firm's [net interest income] recovery by about a year relative to original expectations and have reduced capital return opportunities, we still see a meaningful earnings growth acceleration into 2024 and 2025," Blostein said.

Meanwhile, Bank of America's Craig Slegenthaler stuck with an underperform rating, writing in a note to clients that it was too early to say the coast is clear for Schwab.

"While SCHW's money market flows have declined in April, which could indicate sorting is decelerating, April is also tax season, which should pressure m/m growth across cash. If money market flows are low again in May, this would be a positive sign for sorting," analyst Craig Slegenthaler wrote.

Shares of Schwab were up 2.3% on Tuesday after rising nearly 4% on Monday after the earnings report.

— Jesse Pound, Michael Bloom

Deutsche Bank adds Pool Corp. to top picks list following 'belly-flop'

Deutsche Bank added Pool Corp. to its top picks list within the building products industry on Tuesday, noting its recent dip in share price and attractive valuation.

Analyst Joe Ahlersmeyer reiterated his buy rating on the stock. His price target of $460 implies shares could rally 36.3% from where they ended Monday's session.

The upgrade comes amid what Ahlermeyer called a "belly-flop" for the stock, which has pulled back after a January rally. Ahlersmeyer said the dip provides a "second chance" to buy in and takes away some risk. However, despite the recent retreat, the stock is still up 12.6% for the year.

"We continue to view the significant pullback in POOL's share price ... as detached from the fundamentals and valuation," he said in a note to clients Tuesday. "Most investors agree that the topline scenario necessary to substantiate the current valuation is largely out of the realm of probability."

Shares were up 0.9% in Tuesday's session.

— Alex Harring

Homebuilding stocks gain on slight March housing starts beat

A slew of homebuilding stocks gained on Tuesday after housing starts for March narrowly beat estimates.

The iShares U.S. Home Construction ETF added 2%, gaining for a third straight day, while the SPDR S&P Homebuilders ETF added 1.6%.

Individual homebuilding stocks also rose, with PulteGroup, Lennar and KB Home last up 3.4%, 2.9% and 2.2% respectively

— Samantha Subin

CBOE Volatility Index reaches lowest level since January 2022

The Chicago Board Options Exchange's CBOE Volatility Index hit its lowest levels since Jan, 2022 during Tuesday's trading session.

The index is derived from the prices of the S&P 500 index options with near-term expiration dates and is a popular measure of the market's expectations of volatility. It was down 0.22 points at 16.72, or 1.3%, Tuesday afternoon.

— Hakyung Kim

All eyes on subscriber numbers when Netflix reports after the bell

Subscriber growth will be top of mind for investors and traders when Netflix reports first-quarter results after the bell Tuesday.

Just a year ago, the company reported its first subscriber loss in more than decade as competition in the streaming market ramped up, forcing shares to crater in the session that followed.

Analyst estimates are calling for earnings of $2.86 a share on $8.18 billion in revenue, according to those polled by Refinitiv.

Along with subscriber numbers, Wall Street is also on the lookout for information related to the company's ad-supported tier, launched last year, and the streamer's initiatives to crack down on password sharing. Netflix in February outlined guidelines for users in four countries.

According to UBS analyst John Hodulik, advertising tiers alone could deliver a 10% tailwind to revenue over the coming years. The analyst is also watching how paid sharing will impact the company's near-term growth, he added.

Wells Fargo's Steven Cahall, who remains bullish on Netflix heading into earnings, said in a recent note that he expects management to appear "optimistic on the lift to the P&L from paid sharing implementation."

"This should push estimates higher, and supports NFLX's continued evolution," he wrote.

Some Wall Street analysts, however, remain cautious heading into the print, with Goldman Sachs' Eric Sheridan standing by his sell rating. The analyst also expects in-line subscriber performance, he said in a recent note.

So far this year, the stock's gained 13.3% after a roughly 51% slump in 2022.

— Samantha Subin

Expect volatility as earnings reports come in, says Schwab's Frederick

Don't be surprised if markets seem more volatile this week as earnings season gains some steam, according to Charles Schwab's Randy Frederick.

"I suspect we'll experience higher volatility this week as earnings reports roll in, but it's impossible to know whether they will be a net positive or negative for stocks," the managing director of trading and derivatives said. "Therefore, my outlook for this week is 'volatile' and 'neutral.'"

Given this setup, Frederick is bracing for some intra-week volatility, although he expects the S&P to hover around these levels by next Friday. The "upper resistance" on the benchmark index near the 4,200 level should "keep a lid on any attempted rallies," he added.

— Samantha Subin

Dow is up more than 2% so far this month

With slightly more than half of the trading month completed, the Dow is up 2.1%.

April has historically been the best month of the year for the 30-stock index, with an average advance of 1.9% going back to 1950. By comparison, the Dow has added just 0.7% when averaging all months in that time period.

Previous pre-election years are typically even better for April. The Dow has gained 3.9% when averaging every April in the years proceeding an election since 1950.

With the 2.1% advance, the Dow has performed the best of the three major indexes so far this month. The S&P 500 has gained 1%, while the Nasdaq Composite has shed 0.7%.

CNBC Pro subscribers can read more about why April is the best month for the blue-chip index here.

— Alex Harring

Bank of America CEO Brian Moynihan says he sees a relatively mild recession

Bank of America CEO Brian Moynihan said Tuesday he sees only a slight recession hitting the U.S. as consumers remain in solid shape.

"Everything points to a relatively mild recession given the amount of stimulus that was paid to people and the money they have left over," Moynihan said in the bank's quarterly earnings call. "At the end of the day, we don't see the activity on the consumer side slowing at a pace that would indicate that, but we would see commercial customers are being more careful."

Moynihan said that Bank of America's research team has been consistent in calling for a mild downturn in light of the Federal Reserve's aggressive rate hikes. The bank is predicting annualized GDP contraction in the range of half to 1 percentage point in the next three quarters before going back to positive growth, he said.

— Yun Li

Tax Day is here and refunds kick off April on a down note

Tax Day has arrived, and the latest refunds are looking light compared to last year.

The average refund amount is $2,878 for the week ending April 7, the latest data available from the Internal Revenue Service. That's a decline of more than 9% from a year ago. Largely this decline is driven by the elimination of certain tax credits after the expiration of pandemic-era relief, including an expansion of the child tax credit.

Don't expect Uncle Sam to boost refunds as the IRS continues to process a deluge of 2022 returns, which are due on April 18.

"As tax refunds continue to lag last year into April, we see little chance of reaching last year's refund levels," wrote Deutsche Bank analyst Krisztina Katai in an April 18 report. She referred to Citigroup and Wells Fargo warning of softening consumer spending on their first-quarter conference calls.

Naturally, there's a way for investors to play these smaller tax refunds – and a more challenged consumer who's now stretching a less-generous check from the Tax Man.

Defensive names, such as Walmart and Dollar Tree are among the "players well positioned to take advantage of value-seeking consumers," she wrote.

Darla Mercado, Michael Bloom

Stocks making the biggest moves midday

These companies are making headlines in midday trading.

  • Southwest Airlines – Shares of the airline fell more than 1% after computer issues on Tuesday led Southwest to ground flights around the country. At least 1,500 flights, or 36% of Southwest's schedule, were delayed, according to flight-tracking site FlightAware.
  • Bellus HealthGSK – Bellus shares roughly doubled after GSK said it would acquire Canada-based biopharmaceutical company Bellus. Bellus's stock jumped 98%; the U.S.-listed shares of GSK dipped 1.6%. 
  • Goldman Sachs – Shares slid 1.3% after Goldman Sachs reported first-quarter revenue of $12.22 billion, lower than the $12.79 billion forecasted by analysts polled by Refinitiv. The investment bank also reported a $470 million hit tied to a partial sale of its Marcus loans portfolio.

Read on for more movers here.

— Sarah Min

PowerSchool advances 3% as Goldman Sachs gets off the sidelines

Shares of education technology stock PowerSchool rose 3.4% after Goldman Sachs said the stock was worth buying.

Analyst Gabriela Borges upgraded the education technology stock to buy from neutral. Her $24 price target implies the stock will rally 20% from where it closed on Monday.

"We believe the breadth of PowerSchool's platform is unique and this solidifies its leadership position," she said in a note to clients Tuesday.

Despite the rally, the stock has still fallen more than 10% this year. CNBC Pro subscribers can read the full story here.

— Alex Harring

Expedia stock is undervalued and management could buyback more shares, Bank of America says

Expedia is undervalued and the company's management could present better forward guidance and buyback more shares to boost the stock price, according to Bank of America.

The firm reiterated a buy rating on the stock with a $150 price target, which represents about 61% upside for investors from Monday's closing price of $93.38.

"While we are disappointed in YTD Expedia stock performance, we see opportunity for upside for the stock based on realization of potential VRBO value (which could require changes in management disclosure), strong FCF generation to buy back stock, and closing the discount range to Booking to historical averages," BofA research analyst Justin Post wrote on Monday.

— Brian Evans

Bond allocations vs. stocks at 14-year high, BofA survey shows

Risk-averse investors have taken their largest position of bonds relative to stocks in 14 years, according to the latest Bank of America Global Fund Managers survey.

The April survey showed that portfolios collectively are a net 10% overweight on bonds, a level not seen since March 2009 when the equity market bottomed amid the Great Financial Crisis. Equity allocations are a net 29% underweight.

That finding is part of an overall cautious stance, with cash levels holding at 5.5% of portfolios and above the 5% BofA contrarian "buy" signal for 17 straight months. The survey showed that a net 63% of investors expect a weak economy ahead, with a credit crunch and global recession as the top tail risks.

Consequently, a plurality of investors expect the Federal Reserve to begin cutting interest rates in the first quarter of 2024.

—Jeff Cox

Chipotle, Lockheed Martin, Nvidia among stocks notching 52-week highs

Twenty-four stocks in the S&P 500 hit highs in Tuesday's trading session not seen in at least a year:

  • Omnicom Group trading at all-time high levels back through its history to 1984
  • Booking Holdings trading at all-time highs back to its IPO in Apr, 1999
  • Chipotle trading at levels not seen since November 2021
  • McDonald's trading at all-time highs back to its IPO in 1965
  • GE Healthcare Technologies trading at all-time highs back to its spinoff from GE in Dec, 2022
  • General Electric trading at levels not seen since January 2018
  • Lockheed Martin trading at all-time high levels back to their merger of Martin Marietta and Lockheed in 1995
  • Nvidia trading at levels not seen since March 2022

Office space company WeWork, meanwhile, was trading at all-time lows back to its SPAC merger in October 2021. Commerce Bancshares and renewable energy company Enviva, also outside of the S&P 500, hit lows not seen since November 2020 and March 2020, respectively.

Software giants Oracle, Salesforce and Nvidia were among the stocks notching new highs, with Oracle trading at levels not seen since December 2021 and Salesforce and Nvidia trading at levels not seen since April and March 2022, respectively. Shares of Nvidia were up 2.9% midday after HSBC double-upgraded the chip maker's stock to buy from reduce.

— Pia Singh, Chris Hayes

Goldman's sale of Marcus loans hit revenue, but it boosted earnings, Mike Mayo says

Mike Mayo, Wells Fargo Securities
Scott Mlyn | CNBC
Mike Mayo, Wells Fargo Securities

Goldman Sachs' mixed quarter shows a lingering hangover from its ill-fated foray into consumer banking.

The company, in unwinding its consumer efforts, offloaded a chunk of its Marcus consumer loans, resulting in a $470 million revenue hit that drove its topline miss.

But the move boosted quarterly earnings by a whopping $1.20 per share because it allowed the bank to release $440 million in reserves for loan losses, Mike Mayo of Wells Fargo said Tuesday in a research note.

So its not surprising that while profit of $8.79 a share topped the $8.10 Refinitiv estimate, shares of the bank were last down 2%.

—Hugh Son

Lockheed Martin results lift aerospace stocks

Some aerospace and defense stocks rose Tuesday on the back of positive earnings results from Lockheed Martin.

The S&P 500 industry group tracking the sector was last up about 0.8%, boosted in part by a 3% gain from Lockheed Martin.

L3Harris Technologies' stock was last up 1.1%. Shares of Northrop Grumman, Raytheon Technologies and TransDigm Group also moved higher.

— Samantha Subin

Lockheed Martin shares gain on earnings beat

Shares of Lockheed Martin gained 3% before the bell after the aerospace and defense contractor beat Wall Street's expectations in the first quarter and reaffirmed its full-year guidance. 

Lockheed Martin recorded $15.1 billion in net sales for the first quarter of 2023, compared to $15 billion in the same period last year. The weapons maker reported adjusted earnings per share of $6.43, above the $6 estimate from analysts surveyed by FactSet. The company said first quarter revenue totaled $12.22 billion, below the $12.79 billion consensus estimate from analysts polled by Refinitiv. 

During the first quarter, Australia confirmed it would buy 40 Black Hawk military helicopters made by Lockheed from the U.S. for about $1.96 billion, and Lockheed expressed its hopes to deliver more F-35 fighter planes to the country. Canada also said in January that it would buy 88 F-35 jets from Lockheed in a $14.2 billion project to replace its aging fleet. Lockheed also secured a contract in February with the U.S. Navy worth more than $2 billion to integrate hypersonic strike capability onto surface ships.

"We remain on track to achieve our full year 2023 financial guidance and continue our robust approach to returning capital to shareholders," Lockheed Martin CEO Jim Taiclet said in a press release.

— Pia Singh

Southwest shares fall as airline halts departures

Shares of Southwest Airlines fell 2% after the airline said it has paused all departing flights due to technical issues.

More than 1,200 flights, or 30% of Southwest's scheduled flights, were delayed as of 10:48 a.m. ET, according to flight-tracking site FlightAware.

— Leslie Josephs, Samantha Subin

Bank of America CEO Brian Moynihan expects a 'shallow recession'

Bank of America CEO Brian Moynihan said his firm expects a mild economic downturn.

"We earned good returns for you ... We did this as the economy slowed and remember our research team continues to predict a shallow recession that will occur beginning in the Q3 of 2023," Moynihan said on an earnings call Tuesday.

— Yun Li

Chip stocks rise after HSBC double-upgrades Nvidia

Some chip stocks rose Tuesday, after HSBC double-upgraded Nvidia shares to buy from reduce.

The firm said that "Nvidia's incredible AI pricing power (is) not fully priced in," and that artificial intelligence will provide a significant boost to chip prices. The move lifted shares about 3%.

Other semiconductor companies saw their shares rise after the optimistic upgrade. ON Semiconductor Corp and Advanced Micro Devices were up 1.3% and 0.8%, respectively. Shares of Applied Materials also gained 0.45%. 

— Hakyung Kim

Healthcare, pharmaceutical stocks weigh on Dow

A slew of healthcare and pharmaceutical stocks declined Tuesday, dragging down the Dow Jones Industrial Average 113 points as of 10:06 a.m. EST.

Johnson & Johnson led the declines, falling 2% despite topping earnings expectations for the recent quarter on the top and bottom lines.

The pharmaceutical company reported a $68 million, or loss of 3 cents per share due to charges related settling its talc claims. J&J was the second worst performer in the 30-stock-index.

UnitedHealth was also among the worst Dow performers, falling 1%. Walgreens Boots Alliance and Amgen fell a little under 1% each.

— Samantha Subin

Some earnings winners turn negative

Some stocks that initially gained in the premarket on the back of better-than-expected earnings results turned negative in early morning trading.

That included Bank of America shares, last trading down 0.1% Johnson & Johnson lost 2.4% even after the drug maker topped earnings expectations and lifted its full-year guidance.

— Samantha Subin

S&P 500 opens higher

Stocks were mixed at the market open Tuesday.

The S&P 500 rose 0.3%, while the Dow Jones Industrial Average lost 61 point, or 0.13%. The Nasdaq Composite added 0.5%.

— Samantha Subin

Sunrun adds more than 4% following KeyBanc upgrade

Sunrun jumped 4.1% in premarket trading after KeyBanc said the beat-down solar stock could be due for a rally.

Analyst Sophie Karp upgraded Sunrun overweight from sector weight. Her $27 price target implies an upside of 31.3% from where the stock finished Monday's session.

The stock has lost 14.4% this year despite the S&P 500 gaining 8.1% in the same period. Shares have been beaten down since the Federal Reserve began its interest rate hike campaign, but she said there will likely better days ahead.

"Shares of residential solar companies, including RUN, underperformed materially since the beginning of the tightening cycle, and we acknowledge that the shares have been visibly inexpensive for some time now," she said in a note to clients Monday. "However, we believe that we have seen the worst of the tightening cycle, and therefore the sentiment should be bottoming at these levels."

CNBC Pro subscribers can click here to read more.

— Alex Harring

Stocks making the biggest moves premarket

Check out the companies making headlines before the bell on Monday:

  • Goldman Sachs — The investment bank said first quarter revenue totaled $12.22 billion, below the $12.79 billion consensus estimate of analysts polled by Refinitiv. Fixed income, currencies and commodity trading was $3.93 billion in the first quarter, well below the $4.16 billion Wall Street estimate, according to FactSet. Goldman shares declined by nearly 4%. Goldman also said it took a $470 million hit tied to the sale of consumer loans in its Marcus unit.
  • Johnson & Johnson — The drug and consumer products maker said first quarter sales rose 5.6% to $24.75 billion, above the $23.67 billion consensus estimate of analysts polled by Refinitiv. Adjusted earnings came in at $2.68 per share ex-items, above the consensus estimate of $2.50. The CEO noted "strong performance" across all three business segments with the company raising 2023 guidance midpoints. Shares of the Dow Industrials constituent gained more than 1% premarket.
  • Nvidia — Shares of the chipmaker rose 2.7% Tuesday after HSBC upgraded the stock two levels, to buy from reduce. The firm said Nvidia is showing it has more power in pricing artificial intelligence chips than previously thought. Shares of Nvidia have already soared about 85% since the start of the year, and HSBC thinks there's room for even more appreciation. 

Read here to see which other companies are making moves before the open.

— Pia Singh

HSBC double-upgrades Nvidia, says A.I. pricing power not fully realized in share price

Nvidia shares rose 2.8% in premarket trading after HSBC double-upgraded the stock.

Frank Lee, the firm's head of technology research in Asia, double-upgraded the chip maker's stock to buy from reduce. Lee also more than doubled his price target to $355 from $175.

His new price target implies an upside of 31.5% over Monday's close. Lee said the company's pricing power within it artificial intelligence businesses has not yet been fully realized by Wall Street and investors previously focused too closely on the datacenter business.

"We believe there's more earnings upside vs market expectations in FY24e and beyond," he said in a note to clients Tuesday. "Overall we believe we were too cautious on Nvidia."

The stock has surged 85% this year, outperforming the technology heavy Nasdaq Composite's 16.2% advance.

CNBC Pro subscribers can read the full story here.

— Alex Harring

Building permits decline in March

The latest housing data for March showed building permits decline 8.8% to 1.41 million, the Commerce Department said Tuesday.

That's below the 1.45 million expected, according to economists polled by Dow Jones.

Elsewhere, housing starts fell 0.8% to 1.42 million, but came in slightly above a Dow Jones estimate of 1.40 million.

— Samantha Subin

Survey shows record pessimism on the economy and stocks

Americans have never been this pessimistic about the economy or the stock market in the 17-year history of CNBC's All-America Economic Survey.

A record 69% of respondents have a negative view of the economy, while just 24% say this is a good time to invest in stocks.

All those downbeat feelings are taking a toll on President Joe Biden's ratings: Just 39% approve of the job he's doing, while 55% disapprove.

—Jeff Cox

Goldman shares decline on revenue miss

Shares of Dow member Goldman Sachs fell after the investment bank said revenue came in lighter than Wall Street expected on weak bond trading.

Goldman said first quarter revenue was $12.22 billion, below the $12.79 billion consensus estimate of analysts polled by Refinitiv. Adjusted earnings earnings were $8.79 a share however, above the $8.10 estimate from Refinitiv.

Fixed income, currencies and commodity trading was $3.93 billion in the first quarter, below the $4.16 billion Wall Street estimate, according to FactSet.

Goldman also said it took a $470 million hit tied to the sale of consumer loans in its Marcus unit.

Goldman shares were off by 3% in early trading. Dow futures traded off their highs after Goldman results.

-John Melloy, Hugh Son

Lockheed Martin tops earnings expectations

Lockheed Martin shares added more than 1% before the bell after posting first-quarter earnings results that beat analyst expectations on both the top and bottom lines.

The aerospace company also reaffirmed its EPS and revenue guidance for the full year.

Bank of America gains on earnings beat

Shares of Bank of America rose 3% before the bell after the banking giant topped earnings expectations on both the top and bottom lines as interest rates rose.

The bank reported first-quarter earnings of 94 cents a share on $26.39 billion in revenue. That beat expectations of EPS of 82 cents on $25.13 billion in revenue, according to Refinitiv estimates.

Higher interest rates helped boost Bank of America's net interest income by 25% to $14.4 billion in the period.

— Samantha Subin, Yun Li

Shares of Dow member J&J rise on revenue beat

Shares of Johnson & Johnson were higher in premarket trading after the drug and consumer products giant reported better-than-expected results for the first quarter.

J&J said sales for the period increased 5.6% to $24.75 billion, above the $23.67 billion consensus estimate of analysts polled by Refinitiv. Adjusted earnings came in at $2.68 per shares ex-items, above the consensus estimate of $2.50 a share from Refinitiv.

The CEO noted "strong performance" across all three business segments with the company raising its 2023 guidance midpoints. Shares of the Dow member gained more than 1% in premarket trading.

-John Melloy

GSK to buy Canadian drug developer Bellus Health for $2 billion

Pharma giant GSK announced it would buy Canada's Bellus Health Inc, a drug development company, in an all-cash deal worth $2 billion.

Its offer of $14.75 per share is more than double the value of Bellus shares' closing price on the Nasdaq on Monday.

Luke Miels, GSK's chief commercial officer, said Camlipixant, a treatment under development for chronic coughs, had the "potential to be a best-in-class treatment with significant sales potential."

GSK shares were 0.2% lower at 8:30 a.m. in London.

— Jenni Reid

Europe stocks open higher

Europe's Stoxx 600 index was up 0.2% shortly after the open, with all sectors posting gains — though they were modest.

The U.K.'s FTSE 100 was up 0.3%, Germany's DAX up 0.26% and France's CAC 40 up 0.23% as investors assess corporate earnings and economic conditions.

— Jenni Reid

China's economy expanded 4.5% in the first quarter of 2023

China's gross domestic product rose by 4.5% in the first quarter of 2023, the National Bureau of Statistics said Tuesday.

That was compared with the 4% forecast in a Reuters poll and marks the fastest growth seen since the first quarter of last year. The economy expanded 2.9% in the fourth quarter of 2022.

Retail sales jumped by 10.6% in March, higher than Reuters' expectations to see 7.4% growth – industrial output rose 3.9% for the month, lower than the forecast of 4% by Reuters.

The Chinese yuan strengthened 0.1% to 6.8712 against the U.S. dollar after the report.

– Jihye Lee

Hong Kong EV maker stocks track gains on Wall Street

Hong Kong shares of electric vehicle makers Nio, Xpeng and Li Auto bucked the larger downturn on the Hang Seng index on Tuesday, tracking gains in their U.S.-listed shares.

On Monday, Xpeng's U.S. shares surged nearly 13% after the electric vehicle maker unveiled a new production platform aimed at improving costs and production speeds.

Xpeng's Hong Kong shares climbed 6.02% in early trade Tuesday, while Nio and Li Auto gained 1.96% and 2.56% respectively.

— Lim Hui Jie

Reserve Bank of Australia warns of further tightening if needed

The Reserve Bank of Australia warned of further tightening in monetary policy could come if needed, minutes released from its April meeting showed on Tuesday.

The central bank's board "members observed that it was important to be clear that monetary policy may need to be tightened at subsequent meetings and that the purpose of pausing at this meeting was to allow time to gather more information," it said in its statement.

Board members had debated between raising its benchmark interest rate by 25 basis point and holding the rates steady, adding the case for the latter was stronger.

The RBA kept its policy rate unchanged earlier this month.

– Jihye Lee

Bank of Japan considers lowering inflation target: Jiji

Japan's central bank is considering to lower its inflation outlook for the economy's fiscal year of 2025, Jiji Press reported on Tuesday.

The Bank of Japan will consider introducing a new inflation forecast for fiscal 2025 to "a year-on-year rate of change in the upper 1% range," the report said, adding that it will be reflected in the next quarterly outlook report to be released later this month.

Governor Kazuo Ueda is slated to appear in Japan's parliament later today, Reuters reported.

– Jihye Lee

Johnson & Johnson earnings results due out Tuesday

Johnson & Johnson's first quarter earnings results are set to release Tuesday before the open. Analysts polled by Refinitiv are forecasting earnings of $2.50 per share on revenue of $23.67 billion.

— Sarah Min

J.B. Hunt Transport Services shares fall after earnings results

J.B. Hunt Transport Services shares slid 2% in extended trading after the transportation and logistics firm missed expectations in its first quarter results due to weaker demand, lower prices and higher costs.

J.B. Hunt reported earnings of $1.89 per share on revenue of $3.23 billion. Analysts polled by Refinitiv forecasted earnings of $2.00 per share on revenue of $3.40 billion.

— Sarah Min

Stock futures open flat

U.S. stock futures were flat on Monday night as investors looked ahead to a stacked week of corporate earnings.

Dow Jones Industrial Average futures fell by 9 points, or 0.03%. S&P 500 futures and Nasdaq 100 futures dipped 0.01% and 0.05%, respectively.

— Sarah Min

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