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US producer prices rise moderately in December

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Boeing ( BA ) dips following low 2024 jet deliveries report

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Eli Lilly ( LLY ) falls after weak sales forecast for weight-loss

drug

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Indexes up: Dow 0.47%, S&P 500 0.3%, Nasdaq 0.2%

(Updates to afternoon US trading)

By Chuck Mikolajczak

Jan 14 (Reuters) - U.S. stocks rose modestly in choppy

trade on Tuesday as investors gauged inflation data and braced

for quarterly earnings reports to justify stock valuations and

the strength of the U.S. economy.

Stocks received an initial lift after a Labor Department

report showed the producer price index rose less than expected

in December, but the report failed to sway expectations about

the Federal Reserve's likely path of monetary policy this year.

Early gains evaporated and each of the three major indexes

briefly went lower as investors awaited Wednesday's consumer

price index reading, which will further shape expectations for

inflation and the Fed.

"There was a relief rally early but it goes to show that

there is an inherent level of uncertainty out there about where

rates and the Fed is headed," said Chris Fasciano, chief market

strategist at Commonwealth Financial Network.

"Now we'll see what tomorrow morning brings," he said,

referring to the CPI report.

The Dow Jones Industrial Average rose 197.27 points,

or 0.47%, to 42,495.92, the S&P 500 gained 17.16 points,

or 0.30%, to 5,853.64 and the Nasdaq Composite gained

37.38 points, or 0.20%, to 19,125.48.

The market is pricing in about 29 basis points in rate cuts

from the Fed by the end of 2025, according to LSEG data, with

expectations for a cut of at least 25 bps not rising above 50%

until the June meeting.

Adding to investor caution, U.S. Treasury yields remained at

elevated levels, with the yield on the benchmark 10-year

Treasury note at 4.797%, holding near a 14-month

high.

Quarterly earnings get under way on Wednesday with results

from big banks, which are expected to post stronger profits,

fueled by robust dealmaking and trading. The S&P 500 bank index

climbed 1.3%.

The benchmark S&P 500 is trading at valuations well above

its historical long-term average and a disappointing earnings

season could put further gains for equities in jeopardy.

Healthcare was the worst performing of the 11 major

S&P sectors as Eli Lilly ( LLY ) stumbled 6.7% after it forecast

fourth-quarter sales of weight-loss drug Zepbound below

estimates.

Kansas City Fed president Jeff Schmid said the impact of

Trump's policies was an "active conversation" at the central

bank and that it would respond if either its inflation or

employment goals are pushed off course.

After rallying following the U.S. election, stocks have

struggled recently, with the S&P 500 falling in four of the

previous five weeks as a resilient economy, nagging inflation

and comments from Fed policymakers have fueled worries about the

central bank being less aggressive in cutting interest rates

than previously anticipated.

Concerns about potential tariffs from the Trump

administration that would further stoke inflation have also

lingered.

Boeing ( BA ) fell 2% after the planemaker's annual

deliveries dropped in 2024 to their lowest level since the

pandemic.

Advancing issues outnumbered decliners by a 2.9-to-1 ratio

on the NYSE and by a 1.5-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and five new

lows, while the Nasdaq Composite recorded 34 new highs and 119

new lows.