ASX trades flat, Rio Tinto falls amid merger reports

In the US, stock indexes drifted lower following a mixed set of earnings reports from Morgan Stanley, UnitedHealth Group and other big companies.

The S&P 500 slipped 0.2 per cent after flipping between small gains and losses through the day. More stocks rose within the index than fell, but drops for some influential stocks like Tesla outweighed them. The Dow Jones dropped 68 points, or 0.2 per cent, and the Nasdaq composite fell 0.9 per cent.

The relatively modest moves for stocks came a day after they shot higher on hopes that an encouraging report on inflation may convince the Federal Reserve to deliver more cuts to interest rates this year. Treasury yields were also more placid in the bond market following mixed economic reports on Thursday.

One report showed growth for sales at US retailers wasn’t as strong last month as economists expected. Another said more US workers filed for unemployment benefits last week, and a third said manufacturing in the mid-Atlantic area unexpectedly roared back to growth.

Taken together, the trio of reports suggests the US economy is nowhere near a recession but may be showing some signs of slowing that could keep pressure off inflation. Markets have been lurching down and up in recent weeks as economic reports force traders to revamp their expectations about what the Federal Reserve may do with interest rates in 2025.

On Wall Street, Morgan Stanley climbed 4 per cent after reporting stronger earnings for the latest quarter than analysts expected. CEO Ted Pick said investment banking improved in the quarter. Strong financial markets also helped its total client assets grow to $US7.9 trillion ($12.7 trillion) across its wealth and investment management businesses.

It followed stronger-than-expected profit reports from a bevy of banks the day before, including Citigroup, Goldman Sachs and Wells Fargo.

US Bancorp, meanwhile, fell to one of the worst losses in the S&P 500 after reporting results for the latest quarter that fell short of analysts’ expectations. It dropped 5.6 per cent.

The only stock to lose more in the index was UnitedHealth Group, which tumbled 6 per cent. The insurer reported a stronger profit than expected, but its revenue for the latest quarter came up shy of forecasts. A rise in medical costs surprised analysts. It was the company’s first financial report since the shooting of one of its executives outside a New York City hotel early last month.

Another weight on the market was Tesla, which fell 3.4 per cent on news it is offering discounts on its Cybertruck, the latest sign that Elon Musk’s company is struggling to attract buyers as sales of its electric vehicle models drop for the first time in a dozen years.

Taiwan computer chip maker Taiwan Semiconductor reported Thursday that its profit in the last quarter jumped 57 per cent. The world’s biggest semiconductor manufacturer — which has found itself in the middle of a trade and technology rift between the US and China — said it results were propelled by the artificial intelligence boom.

Its stock that trades in the United States rose 3.9 per cent.

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