US Stock Market: Wall Street caught in swirl of strong big bank profits and worries about interest rates

Stocks are mixed Friday as a swirl of competing forces spins Wall Street, from strong profits for financial giants to worries about interest rates and the economy's strength.

The S&P 500 was 0.2 per cent higher in early trading. The Dow Jones Industrial Average was up 39 points, or 0.1 per cent, at 34,069, as of 9:45 a.M. Eastern time, while the Nasdaq composite was virtually unchanged.

Big banks were helping to lead the way after several of the industry's titans reported profits for the first three months of the year that blew past analysts' expectations.

They helped kicked off the reporting season for big US companies, where expectations are mostly dismal. Despite such worries, JPMorgan jumped 7.4 per cent after it said profit surged by more than half last quarter.

It benefited from the strains unearthed in the banking system last month that shook global markets, because the worries pushed some customers to pull their cash from smaller banks and move it to bigger ones.

Citigroup rose 4.2 per cent after it also reported stronger profit than expected. BlackRock, the world's largest asset manager, rose 4.1 per cent after its earnings likewise topped forecasts.

They helped to balance out some of the worries earlier in the morning about the strength of the economy and the path of interest rates.

A report showed that US shoppers cut their spending at retailers by much more than expected last month. It's the latest piece of data to show the economy is slowing under the weight of much higher interest rates.

The Federal Reserve has been hiking rates at a furious pace over the last year because higher rates can help stifle inflation. The risk is that it also hurts the economy, raising the risk of a recession and dragging on prices for investments.

Compounding worries were comments from a top Fed official on Friday, who said little progress has been made and that more hikes to interest rates are needed.

That dashed some of the hopes that had grown recently on Wall Street that the end was near for the fastest flurry of increases in decades.

Following the comments from Christopher Waller, a member of the Fed's governing board, traders built bets that the Fed will raise rates by a quarter of a percentage point in May. Some even began betting that the Fed may hike rates again in June.

Such expectations helped push Treasury yields higher. The 10-year Treasury yield rose to 3.51 per cent from 3.45 per cent late Thursday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, rose to 4.13 per cent from 3.97 per cent.

"The Fed's challenge has been to cool inflation without putting the economy into a deep freeze in the process," said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office. "The dynamic is still playing out in the markets, and we could see more choppy price action as a result."

Boeing was one of the heaviest weights on Wall Street. Its stock slid 6.5 per cent after the aircraft maker said Thursday that production and delivery of a "significant number" of its 737 Max planes could be delayed because of questions about a supplier's work on the fuselages.

Boeing said the supplier, Spirit AeroSystems, used a "non-standard manufacturing process" during installation of fittings near the rear of some 737s. Boeing said the situation is not an immediate safety issue and planes already flying ?can continue operating safely.