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The tech-heavy Nasdaq lost ground on Tuesday as the market awaited a spate of high profile corporate earnings and the Federal Reserve convened for its monetary policy meeting.

The S&P 500 closed nominally lower after touching a new intraday high, while the blue-chip Dow and the Canadian benchmark stock index finished slightly higher, with energy stocks a bright spot.

Shares of Alphabet Inc and Microsoft Corp fell in extended trading after the companies released their quarterly earnings reports.

“There’s a lot of trepidation over the start of the earnings releases from ‘the magnificent seven,’” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “The stocks have done incredibly well and there’s a little bit of caution being expressed right now and maybe rightly so.”

The Toronto Stock Exchange’s S&P/TSX composite index ended up 27.81 points, or 0.1%, at 21,227.87, its highest closing level since April 2022. The latest economic forecasts from the International Monetary Fund helped to bolster investor hopes of a soft economic landing.

“The optimism continues and it’s shared by the IMF,” said Ben Jang, a portfolio manager at Nicola Wealth. “They came out and upgraded global forecasts with the belief that we’re heading for a soft landing. It’s a sentiment that’s shared by the market place and that’s supported by more economists now.”

The IMF upgraded the outlook for both the United States and China - the world’s two largest economies - citing faster-than-expected easing of inflation.

Resource shares account for nearly 30% of the Toronto market’s weighting so the TSX could particularly benefit from an improved outlook for the global economy.

The TSX energy sector rallied 1.6% as the price of oil settled 1.4% higher at US$77.82 a barrel. Industrials added 0.3% and financials, the TSX’s most heavily weighted sector, ended up 0.2%.

In Canadian stock news, Celestica Inc reported fourth-quarter results that beat analysts’ estimates. Its shares were up 1.6%.

In economic news, the Labor Department reported an unexpected rise in U.S. job openings, hinting that the market remains too solid for the Fed to consider cutting its key policy rate as soon as March.

The Fed is expected to end its policy meeting on Wednesday with a decision to let its key interest rate stand at 5.25%-5.50%. Its accompanying statement and Fed Chair Jerome Powell’s subsequent press conference will be parsed for clues on the timing and number of rate cuts this year.

“I’m going to be looking for language that matches the storyline that we hope to see in 2024, that sometime in the second quarter we’ll see the beginning of a reduction in rates,” Tuz added. “I’m going to be listening for language that confirms that that’s the most likely scenario.”

Fourth-quarter reporting season has shifted into overdrive, with announcements so far by 144 of the companies in the S&P 500. Of those, 78% have delivered consensus-beating earnings, according to LSEG.

On aggregate, analysts now expect fourth-quarter earnings growth of 5.5% over last year, up from the 4.7% seen at the beginning of the month, LSEG data showed.

United Parcel Service slid 8.2% after the package deliverer issued a disappointing annual revenue forecast, weighing on transports.

General Motors jumped 7.8% after the automaker provided an upbeat 2024 earnings forecast, and promised more capital return to shareholders. Ford Motor rose 2.0%.

The S&P 500 declined 0.06% to end at 4,924.97 points. The Nasdaq Composite Index fell 0.76% to 15,509.90 points, while the Dow Jones Industrial Average rose 0.35% to 38,467.31 points.

Six of the 11 S&P 500 sector indexes rose, led by financials, up 1.2%, followed by a 1.01% gain in energy .

Boeing Co shares slid 2.3% ahead of its quarterly earnings report expected before Wednesday’s opening bell. Scrutiny into the planemaker is intensifying over its 737 MAX 7 after a mid-air cabin blowout on Jan. 5.

Citigroup and Bank of America rose over 3% following rating upgrades from Morgan Stanley, pushing the S&P 500 banks index up 2.1%.

Johnson Controls dropped 3.8% after the building products supplier lowered its full-year profit estimate, while MSCI advanced 9.3% after the global index provider posted a higher fourth-quarter profit.

Super Micro Computer rose 3.5% after the server seller projected stronger-than-expected quarterly sales.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.2-to-one ratio. The S&P 500 posted 80 new highs and no new lows. The Nasdaq recorded 126 new highs and 75 new lows. Volume on U.S. exchanges was relatively light, with 10.3 billion shares traded, compared to an average of 11.5 billion shares over the previous 20 sessions.

Reuters, Globe staff

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