Wall Street barely budges; S&P 500 just shy of record

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NEW YORK — U.S. stock indexes drifted to a mixed finish Monday, hanging near their record heights.

The S&P 500 edged down by 1.26, or less than 0.1%, to 5,221.42 after flipping between small gains and losses through the day. It remains within 0.6% of its record set at the end of March.

The Dow Jones Industrial Average slipped 81.33 points, or 0.2%, to 39,431.51, and the Nasdaq composite rose 47.37, or 0.3%, to 16,338.24.

Shares of Incyte jumped 8.6% after the biopharmaceutical company said it would buy back up to $2 billion of its stock. Incyte is the latest big company to say it’s returning cash to shareholders through such purchases, which boost the amount of earnings that each remaining share is entitled to.

GameStop shares soared 74.4% in a swing reminiscent of its maniacal moves from three years ago, when hordes of smaller-pocketed investors sent the stock’s price way above what many professional investors considered rational.

One believer in particular, nicknamed Roaring Kitty, helped lead that charge, and a post on a social media account linked to him stirred more adrenaline. Within the first 70 minutes of trading on Monday, trading of GameStop’s stock was temporarily halted nine times because its price was swinging so sharply.

On the losing end was Fortrea Holdings, a provider of clinical trial management and other services for the life sciences industry, whose shares fell 14.9% after weaker results than analysts expected were reported for the first three months of the year. A forecast for revenue over the full year was also below analysts’ expectations.

Stocks have broadly rallied this month following a rough April, on revived hopes that inflation may ease enough to convince the Federal Reserve to cut its main interest rate later this year. A key test for those hopes will arrive Wednesday, when the U.S. government offers the latest monthly update on inflation that households are feeling across the country.

Other reports this week include updates on inflation that wholesalers are seeing and sales at U.S. retailers. They could show whether fears are warranted about a worst-case scenario for the country, in which stubbornly high inflation would form a devastating combination with a stagnating economy.

Hopes have climbed that the economy can avoid what’s called “stagflation” and hit the bull’s-eye where it cools enough to get inflation under control but stays sturdy enough to avoid a bad recession. Federal Reserve Chair Jerome Powell also gave financial markets comfort when he recently said the Fed remains closer to cutting rates than to raising them, even if inflation has remained hotter than forecast so far this year.

Stronger-than-expected reports on U.S. corporate profits have helped support the market. Companies in the S&P 500 are on track to report growth of 5.4% for their earnings per share in the first three months of the year versus a year earlier, according to FactSet. That would be the best growth in nearly two years.

Earnings season has nearly finished, and reports are already in for more than 90% of companies in the S&P 500. But this week Walmart and several other big names could offer more detail about how U.S. households are faring.

Worries have been rising about cracks showing in spending by U.S. consumers, which has been one of the bedrocks keeping the economy out of a recession. Lower-income households appear to be under particularly heavy strain amid still-high inflation.

In the bond market, Treasury yields eased a bit. The yield on the 10-year Treasury slipped to 4.48% from 4.50% late Friday.