NYSE Dow Jones finished today at:

[bigdog]

Asian stocks follow Wall Street ahead of likely US rate hike

Asian stock markets have followed Wall Street lower as traders prepared for a possible sharp interest rate hike from the Federal Reserve to cool inflation.

apnews.com

Grim news from Walmart sends US markets lower​

By ALEX VEIGA

Big retailers and technology companies led stocks lower on Wall Street Tuesday after Walmart warned that inflation is hurting American consumers’ spending power.

The sell-off comes ahead of the Federal Reserve’s latest interest rate policy statement on Wednesday, when economists expect the central bank to announce another sharp rate hike as it ratchets up its fight against surging inflation.

The S&P 500 fell 1.2%, wiping out nearly half of the benchmark index’s gains from last week. The Dow Jones Industrial Average dropped 0.7% and the tech-heavy Nasdaq Composite closed 1.9% lower.

Walmart slumped 7.6% after the retail giant cut its profit outlook for the second quarter and the full year late Tuesday, saying that rising prices for food and gas are forcing shoppers to cut back on more profitable discretionary items, particularly clothing.
The retailer’s profit warning in the middle of the quarter is rare and raised worries about how the highest inflation in 40 years is affecting the entire retail sector.

Stocks of other major chains also fell. Target dropped 3.6%, Macy’s slid 7.2% and Kohl’s fell 9.1%.
Investors have remained deeply concerned about inflation’s impact on company profits and how it will affect U.S. consumers. While Americans’ finances are relatively strong thanks to savings built up during the pandemic, those nest eggs are being spent on high gas and food prices.

The retailer’s profit warning in the middle of the quarter is rare and raised worries about how the highest inflation in 40 years is affecting the entire retail sector.

Stocks of other major chains also fell. Target dropped 3.6%, Macy’s slid 7.2% and Kohl’s fell 9.1%.

Investors have remained deeply concerned about inflation’s impact on company profits and how it will affect U.S. consumers. While Americans’ finances are relatively strong thanks to savings built up during the pandemic, those nest eggs are being spent on high gas and food prices.

“The client base of Walmart is obviously in probably the lower quarter or maybe lower third of the income brackets,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab. “Those aren’t people that drive most of the discretionary spending anyway, but they are people who are most vulnerable to the inflation pressures.”

Stock indexes were in the red from the get-go Tuesday as traders reacted to Walmart’s announcement.

The S&P 500 fell 45.79 points to 3,921.05. The Dow lost 228.50 points to end at 31,761.54. The Nasdaq fell 220.09 points to 11,562.57.

The major indexes are coming off solid gains last week fueled by mostly better-than-expected reports on corporate profits. Falling yields in the bond market also helped, easing the pressure on stocks after expectations for rate hikes by the Federal Reserve propelled yields higher much of this year.

The central bank is expected to announce a rate hike of up to three-quarters of a percentage point on Wednesday, triple the usual amount. The central bank is waging an aggressive campaign to stem four-decade high inflation. The expected hike would put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest since 2018.

Bond yields were mixed Tuesday. The two-year Treasury yield, which tends to move with expectations for the Fed, rose to 3.04% from 3.02% late Monday. The 10-year yield, which influences mortgage rates, fell to 2.80% from 2.82%.

Technology stocks, retailers and communication companies were among the biggest drags on the benchmark S&P 500 index. Microsoft fell 2.7%, Amazon slid 5.2% and Facebook owner Meta Platforms dropped 4.5%.

The losses easily outweighed gains by health care and utilities stocks. Small company stocks also fell. The Russell 2000 gave up 12.53 points, or 0.7%, to end at 1,805.25.

Investors eyed the latest batch of corporate earnings reports Tuesday.

Shares of automaker General Motors fell 3.4% after the company said its second-quarter profit fell 40% from a year ago, as computer chip and parts shortages hobbled factory output and drove the company’s U.S. sales down more than 15%.

The Detroit automaker earned $1.67 billion from April through June, well below the $2.79 billion it made a year earlier. GM couldn’t deliver 95,000 vehicles during the quarter because it lacked parts.

Shopify slumped 14.1% after the Canadian e-commerce company said it is cutting 10% of its staff, or about 1,000 employees, as it reckons with an unexpected sales downturn after pandemic-fueled growth.

Technology bellwethers Meta, Apple and Amazon report quarterly results later in the week.

“By the end of this week we’ll have a lot of big tech earnings and we’ll have a better feel for how that whole sector is going to go,” Frederick said. “People are maybe hedging a little bit ahead of that big onslaught of tech earnings that we’re going to get this week, plus obviously, there’s concern about the Fed tomorrow.”

The S&P 500 fell 1.2%, wiping out nearly half of the benchmark index’s gains from last week. The Dow Jones Industrial Average dropped 0.7% and the tech-heavy Nasdaq Composite closed 1.9% lower.

The S&P 500 fell 45.79 points to 3,921.05. The Dow lost 228.50 points to end at 31,761.54. The Nasdaq fell 220.09 points to 11,562.57.

 

[bigdog]

Asian shares, oil prices mostly higher after Fed rate hike

Shares are mostly higher in Asia after the Federal Reserve ratcheted up its campaign against surging inflation by raising its key interest rate three-quarters of a point.

apnews.com

US stocks jump after Fed rate hike; tech shares surge​

By ALEX VEIGA

Technology companies led a broad rally for stocks on Wall Street Wednesday as investors welcomed another interest rate hike by the Federal Reserve as sign the central bank is ratcheting up its campaign to fight surging inflation.

In a widely expected move, the central bank raised its key interest rate by three-quarters of a point, lifting the rate to the highest level since 2018.

At a news conference, Chair Jerome Powell suggested the Fed’s rate hikes have already had some success in slowing the economy and possibly easing inflationary pressures. Some on Wall Street saw that as a signal the Fed may not have to raise rates as aggressively in coming months, triggering a rally in the final hour of regular trading.

The S&P 500 climbed 2.6% and the tech-heavy Nasdaq surged 4.1%, its biggest gain in over two years. The Dow Jones Industrial Average rose 1.4%. Smaller company stocks also gained, lifting the Russell 2000 2.4% higher.

Bond yields turned broadly lower following the Fed’s announcement. The two-year Treasury yield, which tends to move with expectations for the Fed, fell to 2.98% from 3.06% late Tuesday. The 10-year yield, which influences mortgage rates, fell to 2.77% from 2.79%.

Rate increases like Wednesday’s, the fourth so far this year, make borrowing more expensive and slow the economy. The hope is that the Fed and other central banks can deftly find the middle ground where the economy slows enough to whip inflation but not enough to cause a recession.

“The Fed raised rates by the expected 75 basis points but recognized that the economy is softening while the job market remains strong,” said Jay Hatfield, CEO of Infrastructure Capital Advisors. “The statement is slightly dovish and is bolstering the tech-led stock rally that started this morning.”

Some Wall Street analysts were less optimistic that the Fed may opt for more moderate rate hikes from here, especially since inflation has accelerated to 9.1%, the fastest annual pace in 41 years.

Charlie Ripley, senior investment strategist at Allianz Investment Management, called the hike “warranted.”

“That being said, recent economic data is now introducing a higher degree of uncertainty around the path of policy as we move forward from here,” Ripley said.

In a note Wednesday, analysts at Citi said that while Powell mentioned that a slowdown in hikes would be appropriate at some point, exactly when that might be remains undetermined, adding that they “would not view this as a particularly dovish comment.”

“We continue to expect core inflation to push the Fed to hike more aggressively than they or markets anticipate,” the analysts wrote, noting they expect the Fed will announce another three-quarter point increase at its September policy meeting, with further rate hikes continuing into early 2023.

The S&P 500 rose 102.56 points to 4,023.61. The Dow gained 436.05 points to close at 32,197.59. The Nasdaq rose 469.85 points to 12,032.42, and the Russell 2000 picked up 43.09 points to end at 1,848.34. The indexes are now all on pace for a weekly gain, extending Wall Street’s strong July rally. The S&P 500 is up 6.3% so far this month.

It’s not uncommon for stocks to rally when the Fed issues a new interest rate policy statement, only to sell-off the next day.

Stocks have been choppy this week following solid gains last week that were mainly fueled by better-than-expected reports on corporate profits.

Inflation remains at the forefront of investors’ minds, however. Markets were spooked Monday after retail giant Walmart warned that its profits are being hurt by rising prices for food and gas, which are forcing shoppers to cut back on more profitable discretionary items such as clothing.

The retailer’s profit warning in the middle of the quarter was rare and raised worries about how the highest inflation in 40 years is affecting the entire retail sector.

Meanwhile, some parts of the economy are already slowing because as the Fed has raised rates, particularly the housing industry. Sales of previously occupied U.S. homes slowed in June for the fifth month in a row as mortgage rates have climbed sharply this year. Expectations of higher overall rates has pushed up the 10-year Treasury yield, which influences rates on home loans.

Investors kept an eye on the latest batch of corporate earnings reports Wednesday, including strong earnings from Google’s owner Alphabet and Microsoft.

Shares in Microsoft and Google parent Alphabet rose 6.7% and 7.7%, respectively, after their latest quarterly reports. Boeing shares rose 0.1% after the aerospace company reported it delivered more planes in the first quarter than it has since the start of the pandemic.

Technology and communication services stocks accounted for a big share of the S&P 500′s gains. Nvidia rose 7.6% and Netflix added 6%.

Retailers, restaurant chains and other companies that rely on direct consumer spending also helped lift the market. Chipotle Mexican Grill jumped 14.7% after the restaurant chain reported second-quarter earnings that beat analysts’ forecasts.

Spotify Technology vaulted 12.2% after the music streaming service reported monthly active user and premium subscriber numbers that exceeded the Street’s expectations.

Technology companies led a broad rally for stocks on Wall Street Wednesday as investors welcomed another interest rate hike by the Federal Reserve as sign the central bank is ratcheting up its campaign to fight surging inflation.

The S&P 500 climbed 2.6% and the tech-heavy Nasdaq surged 4.1%, its biggest gain in over two years. The Dow Jones Industrial Average rose 1.4%. Smaller company stocks also gained, lifting the Russell 2000 2.4% higher.

 

[bigdog]

Asian shares mostly higher after rally on Wall Street

Asian shares are mostly higher following a broad rally on Wall Street, but Hong Kong's benchmark sank more than 2%.

apnews.com

Wall Street closes higher after shaky start on GDP report​

By ALEX VEIGA

Stocks closed broadly higher again Thursday as investors grew more optimistic that a slowing U.S. economy means the Federal Reserve can temper its aggressive interest rate hikes aimed at taming inflation.

The S&P 500 rose 1.2% as more than 80% of the stocks in the benchmark index closed higher. The Dow Jones Industrial Average gained 1% and the Nasdaq rose 1.1%. Smaller company stocks edged out the broader market, lifting the Russell 2000 by 1.3%.

The Commerce Department reported that the economy contracted at a 0.9% annual pace last quarter. The decline in the gross domestic product — the broadest gauge of the economy — followed a 1.6% annual drop from January through March. Consecutive quarters of falling GDP are an informal, though not definitive, indicator of a recession.

The GDP report signaled weakness across the economy. Consumer spending slowed as Americans bought fewer goods. Business investment fell. Inventories tumbled as businesses slowed their restocking of shelves, shedding 2 percentage points from GDP.

The Federal Reserve has made slowing the U.S. economy to tame the highest inflation in 40 years its goal by raising interest rates, most recently on Wednesday. The latest GDP report, along with other recent weak economic data, could be giving some investors confidence that the central bank will be able to ease up on the size of any further rate hikes in the months to come, analysts said.

“Sometimes bad news is good news,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “The Fed may not have to be as aggressive as once thought. That’s what investors are looking at.”

In a research note Thursday, Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities, said “Whether or not we are in a recession will be debated by academics in the months ahead. However, today’s report unequivocally reflects a substantial weakening in economic activity, and raises the likelihood of a dovish pivot by the Fed.”

Traders now see a 74% chance that the Fed will raise its key rate by a half-point at its next policy meeting in September, and only a 26% chance of another 0.75-point increase, according to CME Group.

The central bank raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The move sparked a broad market rally led by technology stocks that helped give the Nasdaq its biggest gain in over two years. The major indexes are now all on pace for a weekly gain, extending Wall Street’s strong July rally.

On Thursday, the S&P 500 rose 48.82 points to 4,072.43, while the Dow added 332.04 points to close at 32,529.63. The Nasdaq gained 130.17 points to 12,162.59. The Russell 2000 rose 24.69 points to 1,873.03.

Technology stocks and retailers, restaurant chains and other companies that rely on direct consumer spending helped lift the S&P 500 Thursday. Microsoft rose 2.9%, Target gained 3.1% and McDonald’s added 1.8% higher.

Communication services stocks were the only laggards. Meta Platforms fell 5.2% after the social media giant said its revenue fell last quarter for the first time ever, dragged down by a drop in ad spending.

In a busy week of corporate earnings reports investors have focused on what companies are saying about inflation and the impact rising interest rates are having on their business and customers.

Markets were spooked Monday after retail giant Walmart warned that its profits are being hurt by rising prices for food and gas, which are forcing shoppers to cut back on more profitable discretionary items such as clothing.

Stanley Black & Decker slumped 16.1% Thursday after the tool maker’s second-quarter results fell short of Wall Street’s estimates. The company noted that demand significantly slowed in May and June.

Oshkosh fell 6.2% after the Wisconsin-based maker of postal trucks and military vehicles reported weaker-than-expected quarterly results and lowered its 2022 profit guidance, citing lingering supply chain disruptions and inflation.

Apple’s profit and revenue fell in its April-June quarter, but the results still beat analysts’ forecasts. The iPhone maker’s shares rose 0.4%, but added 3.9% in after-hours trading following the release of its earnings report.

Amazon jumped more than 12% in after-hours trading. It reported its second-consecutive quarterly loss but its revenue topped Wall Street’s expectations. The stock closed 1.1% higher during regular trading.

Stocks closed broadly higher again Thursday as investors grew more optimistic that a slowing U.S. economy means the Federal Reserve can temper its aggressive interest rate hikes aimed at taming inflation.

The S&P 500 rose 1.2% as more than 80% of the stocks in the benchmark index closed higher. The Dow Jones Industrial Average gained 1% and the Nasdaq rose 1.1%. Smaller company stocks edged out the broader market, lifting the Russell 2000 by 1.3%

 

[bigdog]

Stocks rally again, close out best month since Nov. 2020

Stocks are finishing higher on Wall Street Friday as investors closed out the best month for the S&P 500 since November 2020.

apnews.com

Stocks rally again, close out best month since Nov. 2020​

By ALEX VEIGA

Stocks racked up more gains Friday as Wall Street closed out its best month since November 2020, a welcome breather for investors after a punishing year for the market.

The S&P 500 index, a benchmark for many stock funds, rose 1.4% and finished 9.1% higher for July. A rebound in technology stocks, big retailers and other companies that rely on direct consumer spending helped power the index’s broad gains this month. The index is still down 13.3% for the year.

The tech-heavy Nasdaq rose 1.9%, ending the month 12.4% higher, while the Dow Jones Industrial Average rose 1% and notched a 6.7% gain for the month.

The latest rally came as investors weighed a mix of company earnings reports and new data showing inflation jumped by the most in four decades last month.

Stock gains in recent weeks have been fueled by better-than-expected corporate earnings reports and falling bond yields, which have pulled back after soaring much of this year on expectations of higher interest rates.

“You’ve had 10-year Treasury yields come down precipitously,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “With inflation so hot, I think the expectation is the Fed stays on path, but it’s damaging enough for the economy that they’re going to have to pivot in 2023.”

The S&P 500 rose 57.86 points to 4,130.29. The Dow gained 315.50 points to close at 32,845.13. The Nasdaq rose 228.09 points to 12,390.69.

Smaller company stocks also gained ground. The Russell 2000 rose 12.20 points, or 0.7%, to 1,885.23. It ended July with a 10.4% gain.

Weak economic data, including a report Thursday showing that the U.S. economy contracted last quarter and could be in a recession, have also spurred stocks higher by giving some investors confidence that the Federal Reserve will be able to dial back its aggressive pace of rate hikes sooner than expected.

The central bank raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The Fed is raising rates in a bid to slow the U.S. economy and quell inflation.

An inflation gauge that is closely tracked by the Federal Reserve jumped 6.8% in June from a year ago, the biggest increase in four decades, leaving Americans with no relief from surging prices. On a month-to-month basis, inflation accelerated to 1% in June from May’s 0.6% monthly increase, the Commerce Department said Friday.

The figures underscored the persistence of the inflation that is eroding Americans’ purchasing power, dimming their confidence in the economy and threatening Democrats in Congress in the run-up to the November midterm elections.

Some market watchers advised against placing too much emphasis on the June data, however.

“This inflation metric is for June and we know much has changed since then, especially gas prices, so investors should put this inflation report into historical context,” said Jeffrey Roach, chief economist for LPL Financial. “Looking ahead, July inflation rates will ease a bit from the previous month as food and energy costs should wane in July.”

Still, inflation hit one company in its earnings on Friday: consumer staples giant Proctor & Gamble. Shares in the maker of Tide laundry detergent fell 5.3% after the company said consumers were cutting back, but the company’s recent price increases were keeping profits up.

Other company earnings reports were more encouraging.

Exxon and Chevron posted record quarterly profits last quarter amid high oil and gas prices. The two companies made $46 billion last quarter and roughly four times the amount of money they made in the same period a year earlier. Chevron shares jumped 8.9% to a six-week high, while Exxon rose 4.6%.

Amazon surged 10.4% for the biggest gain in the S&P 500 after the company posted a quarterly loss, but its revenue jumped sharply in the quarter.

Apple rose 3.3% after its quarterly earnings came in better than Wall Street expected. The iPhone maker saw its profit for the April-June period decline by 10% while revenue edged up 2% as it grappled with manufacturing headaches and inflation pressures.

It was a mixed day in the bond market. The two-year Treasury yield, which tends to move with expectations for the Fed, rose to 2.89% from 2.87% late Thursday. The 10-year yield, which influences mortgage rates, fell to 2.65% from 2.67%.

 

[bigdog]

Stocks racked up more gains Friday as Wall Street closed out its best month since November 2020, a welcome breather for investors after a punishing year for the market.

The S&P 500 index, a benchmark for many stock funds, rose 1.4% and finished 9.1% higher for July. A rebound in technology stocks, big retailers and other companies that rely on direct consumer spending helped power the index’s broad gains this month. The index is still down 13.3% for the year.

The tech-heavy Nasdaq rose 1.9%, ending the month 12.4% higher, while the Dow Jones Industrial Average rose 1% and notched a 6.7% gain for the month.

 

[bigdog]

Stocks start August with slide after best month since 2020

Stocks are closing slightly lower on Wall Street Monday as investors began another busy week of earnings and economic reports. The S&P 500 fell 0.3%.

apnews.com

Stocks slide to start August after best month since 2020​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks on Wall Street gave up early gains and closed slightly lower Monday as investors began another busy week of company earnings and economic reports.

The S&P 500 gave up an early gain to end down 0.3%. The Dow Jones Industrial Average dipped 0.1% and the Nasdaq fell 0.2%. Smaller company stocks also gave back some of their recent gains, nudging the Russell 2000 0.1% lower.

Bond yields mostly fell. The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.60% from 2.65% late Friday.

August’s subdued opening follows a solid rally for stocks last month: July was the best month for the S&P 500 index since November 2020. But this week’s array of economic reports and company earnings has left traders “a little cautious,” said Lindsey Bell, chief markets and money strategist at Ally Invest.

“Investors are still assessing where we break from here – further to the upside or reverse course,” Bell said.

The benchmark S&P 500 index fell 11.66 points to 4,118.63. It’s coming off a 9.1% gain in July, but remains down 13.6% for the year.

The Dow lost 46.73 points to close at 32,798.40, while the Nasdaq slid 21.71 points to 12,368.98. The Russell 2000 ended down 1.92 points at 1,883.31.

Banks, health care companies and tech stocks were among the biggest weights on the S&P 500. JPMorgan Chase fell 1%, UnitedHealth Group dropped 1.3% and Intuit slid 1.7%.

U.S. crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.5%.

Those losses outweighed solid gains by retailers and consumer products makers. Target rose 1.3% and Procter & Gamble rose 2.9%.

Boeing jumped 6.1% for the biggest gain in the S&P 500 after it cleared a key hurdle with federal regulators and could soon resume deliveries of its large 787 airliner.

Stocks have been falling for much of the year as investors worry about high inflation and rising interest rates. A key concern remains whether central banks will raise interest rates too aggressively and push economies into a recession.

The Federal Reserve raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The goal is to slow the U.S. economy to help temper the impact from inflation. An inflation gauge that is closely tracked by the Fed jumped 6.8% in June from a year ago, the biggest increase in four decades.

A surge in oil prices throughout the year only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and that has raised gasoline prices in the U.S. to record levels.

A report last week showed that the U.S. economy contracted last quarter and could be in a recession. Stocks’ recent rally came as worrisome economic reports gave some investors confidence that the Fed can dial back its aggressive pace of rate hikes sooner than expected.

Several big companies are reporting earnings this week, which will give investors insight into how inflation is impacting businesses and consumers. Construction equipment maker Caterpillar and coffee chain Starbucks report earnings on Tuesday. Pharmacy chain CVS reports earnings on Wednesday.

More than half of the companies in the S&P 500 have reported their latest earnings results, which have been mostly better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Businesses have been increasing prices in an effort to keep up profits.

Wall Street will also get several updates on the job market, which has remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely-watched monthly employment report for July on Friday.

Stocks on Wall Street gave up early gains and closed slightly lower Monday as investors began another busy week of company earnings and economic reports.

The S&P 500 gave up an early gain to end down 0.3%. The Dow Jones Industrial Average dipped 0.1% and the Nasdaq fell 0.2%. Smaller company stocks also gave back some of their recent gains, nudging the Russell 2000 0.1% lower.

The Dow lost 46.73 points to close at 32,798.40, while the Nasdaq slid 21.71 points to 12,368.98. The Russell 2000 ended down 1.92 points at 1,883.31.

 

[bigdog]

Asian stocks higher as US-China tensions rise

Asian stock markets are higher as traders watch for signs trade might be disrupted by U.S.-Chinese tensions over an American lawmaker’s visit to Taiwan.

apnews.com

Stocks slip on Wall Street after another meandering day​

By DAMIAN J. TROISE and STAN CHOE

NEW YORK (AP) — U.S. stocks dipped Tuesday following another day of meandering trading, as Wall Street debates whether the market’s strong recent run is the start of a turnaround or just a temporary blip.

The S&P 500 fell 27.44, or 0.7%, to 4,091.19 after drifting between a loss of 0.9% and a gain of 0.5% through the day. The Dow Jones Industrial Average dropped even more, losing 402.23, or 1.2%, to 32,396.17, largely because of a tumble for equipment maker Caterpillar. The Nasdaq composite held up better but still slipped 20.22, or 0.2%, to 12,348.76.

Treasury yields climbed through the day as concerns calmed a bit that the first visit by a U.S. Speaker of the House to Taiwan in 25 years could spark conflict between the world’s two largest economies. Analysts also cited comments by Federal Reserve officials that suggested continued hikes to interest rates are coming in order to knock down inflation.

The S&P 500 is down nearly 1% so far this week after spurting in July to its best month since late 2020. It was a rare winning stretch for the market, which has struggled this year under worries about the highest inflation in 40 years and rising interest rates from the Federal Reserve to combat it.

Some weak recent data on the economy heightened speculation that the peak for inflation and for the Federal Reserve’s aggressive rate hikes may be approaching or has already passed. The weak data, though, also shows the risk of a recession as the Fed puts the brake on the economy.

A report on Tuesday showed that U.S. employers posted fewer job openings in June, and the number was weaker than economists expected. A lot rides on whether the job market can remain resilient. It’s been helping to prop up the economy as inflation tears into the finances of households across the country.

On Friday, a report will show how many workers U.S. employers added last month, and economists expect it to show the unemployment rate remains very low even as hiring slowed.

More support for Wall Street recently has come from stronger-than-expected corporate profits for the spring. On Tuesday, rideshare company Uber surged 18.9% after it reported stronger revenue than analysts expected.

Other better-than-expected reports so far this earnings season have helped the S&P 500 climb 11.6% since hitting a low in mid June. Such rallies of more than 10% have historically been common within long-term down markets, though more sharp drops can quickly follow them. Since 1929, “bear markets,” which are what Wall Street calls a long-term drop of 20% or more for stocks, have seen an average of 1.5 such “bear market rallies,” strategists wrote in a BofA Global Research report. Savita Subramanian wrote in the report that she is sticking with her year-end target of 3,600 for the S&P 500, which would imply a further 12% drop.

One discouraging signal for investors came Tuesday from a profit report by Caterpillar, seen by some on Wall Street as an economic bellwether. Its stock fell 5.8% after the Illinois-based maker of backhoes and bulldozers reported weaker revenue for the latest quarter than analysts expected.

Much of Wall Street’s focus Tuesday was also centered across the Pacific Ocean on U.S. House Speaker Nancy Pelosi, whose plane touched down in Taiwan a little after trading began in New York. Her visit ratchets up tensions with China, which claims Taiwan as its own and quickly announced it would conduct military maneuvers in retaliation for her presence.

The worry in financial markets is that tensions could boil over, leading to blockages in international trade. China and Taiwan are together the source of half the semiconductor chips consumed by the world “and almost all of the latest high-tech chips,” High Frequency Economics chief economist Carl Weinberg wrote in a report.

Treasury yields fell in the morning with the worries but recovered as the day progressed. The 10-year yield rose to 2.75% from 2.61% late Monday.

The S&P 500 fell 27.44, or 0.7%, to 4,091.19 after drifting between a loss of 0.9% and a gain of 0.5% through the day. The Dow Jones Industrial Average dropped even more, losing 402.23, or 1.2%, to 32,396.17, largely because of a tumble for equipment maker Caterpillar. The Nasdaq composite held up better but still slipped 20.22, or 0.2%, to 12,348.76.

 

[bigdog]

Asian shares rise on optimism on economic data, earnings

Asian shares are mostly higher as investors welcome encouraging economic data and quarterly earnings reports from big companies.

apnews.com

US stocks rise following solid earnings reports​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks on Wall Street closed broadly higher Wednesday as investors welcomed encouraging economic data and quarterly earnings reports from big companies including Starbucks.

The S&P 500 rose 1.6% to an almost 2-month high, while the Nasdaq gained 2.6%. Both indexes more than recouped losses earlier in the week. The Dow Jones Industrial Average rose 1.3% and the Russell 2000 index of smaller companies ended 1.4% higher.

Technology companies, retailers and communications companies were some of the biggest winners. Only energy sector stocks fell, dragged down by lower oil prices.

Investors cheered a report on the services sector, which makes up the bulk of the U.S. economy. The sector grew faster than expected in July, according to the Institute for Supply Management. A separate report showed U.S. orders for big-ticket, durable goods increased more than expected in June.

Some weak recent data on the economy heightened speculation that the peak for inflation and for the Federal Reserve’s aggressive rate hikes may be approaching or has already passed. The weak data, though, also shows the risk of a recession as the Fed puts the brake on the economy.

That’s why Wednesday’s more positive economic reports helped put traders in a buying mood

“That just provides people with more evidence that this economy is hanging in there,” said Jeff Buchbinder, equity strategist for LPL Financial. “At this point, we have a combination of evidence that inflation is coming down.”

The S&P 500 rose 63.98 points to 4,155.17. It had been down nearly 1% for the week heading into Wednesday. It’s now up 0.6% for the week.

The Dow gained 416.33 points to 32,812.50. The Nasdaq added 319.40 points to end at 12,668.16. The Russell 2000 picked up 26.48 points to 1,908.93.

The yield on the 10-year Treasury fell to 2.71% from 2.73% late Tuesday.

The S&P 500′s bumpy start this week follows its best month since late 2020. July was a rare winning stretch for the market, which has struggled this year under worries about the highest inflation in 40 years and rising interest rates from the Federal Reserve to combat it.

Earnings remain in focus this week as investors parse the latest results and statements from companies to better understand how inflation is affecting businesses and consumers.

Drugstore chain CVS rose 6.3% after reporting solid financial results and raising its profit forecast for the year. Starbucks rose 4.3% after also reporting solid financial results. Nearly three-quarters of companies within the benchmark S&P 500 have reported earnings for the latest quarter and the results have mostly beaten analysts’ forecasts.

Several companies, though, have slipped amid disappointing results. Taco Bell owner Yum Brands fell 1.9% following a weak earnings report and online dating service company Match Group tumbled 17.6% after giving investors a weak financial forecast.

PayPal jumped 9.2% on a report that activist investor Elliott Management has taken a large stake in the payment company.

Robinhood Markets, whose stock trading app helped bring a new generation of investors to the market, rose 11.7% following an announcement that it’s cutting nearly a quarter of its workforce. Crashing cryptocurrency prices and a turbulent stock market have kept more customers off its app.

Oil prices fell following OPEC’s decision to boost production in September at a much slower pace than previous months. U.S. crude oil fell 4% to settle at $90.66 per barrel, while Brent crude, the international standard, settled 3.7% lower at $96.78 per barrel.

The pullback in oil prices weighed on energy sector stocks. Hess fell 3.6%

Markets are also watching for potential economic fallout from China after U.S. House Speaker Nancy Pelosi’s visit to Taiwan. China claims self-ruled Taiwan as part of its territory, and banned imports of Taiwanese citrus fruits and frozen fish in retaliation for Pelosi’s visit. But it has avoided disrupting the flow of computer chips and other industrial goods, a step that could jolt the global economy.

Upcoming data on the jobs market could help investors determine how the Federal Reserve will move ahead with its interest rate policy, which has been aggressive in an effort to try and tame inflation. U.S. jobless claims numbers for last week will be released Thursday, and the government issues its July jobs report on Friday.

“Expectations for Fed rate hikes maybe got a little bit too aggressive,” Buchbinder said. “We don’t know if we get a pause by year end, but there’s a decent chance we get a signal for a pause by year end.”

Stocks on Wall Street closed broadly higher Wednesday as investors welcomed encouraging economic data and quarterly earnings reports from big companies including Starbucks.

The S&P 500 rose 1.6% to an almost 2-month high, while the Nasdaq gained 2.6%. Both indexes more than recouped losses earlier in the week. The Dow Jones Industrial Average rose 1.3% and the Russell 2000 index of smaller companies ended 1.4% higher.

 

[bigdog]

Asian stock markets rise ahead of US jobs data

Asian stock markets are higher ahead of an update on the health of the U.S. jobs market while the Federal Reserve weighs whether more rate hikes are needed to cool surging inflation.

apnews.com

US stocks end mixed amid earnings, economic updates​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks gave back some of their recent gains Thursday as a choppy day of trading on Wall Street ended with a mixed finish for the major indexes.

The S&P 500 closed 0.1% lower after wavering between small gains and losses. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq rose 0.4%.

Energy stocks, the biggest gainers in the benchmark S&P 500 so far this year, were the biggest drag on the market as the price of U.S. crude oil fell below $90 per barrel for the first time since early February, before Russia’s invasion of Ukraine.

Gains in technology stocks, retailers and elsewhere helped keep the losses in energy, health care and other sectors in check.

The muted trading came as investors continued to review the latest updates on the economy and corporate earnings ahead of the government’s monthly snapshot of the nation’s job market Friday.

Investors are eyeing jobs data to gauge whether any tightening in the labor market might prompt the Federal Reserve to eventually ease up on its interest rate hikes as it fights inflation, potentially lessening the chance of the central bank bringing on a recession.

“They wanted to quell demand and temper inflation and they wanted to do so without unduly impacting the labor market in a negative way,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management. “So far, the Fed is going to assess all of this as according to plan and they’re going to keep going.”

The S&P 500 slipped 3.23 points to 4,151.94, and the Dow dropped 85.68 points to 32,726.82. The Nasdaq rose 52.42 points to 12,720.58. The Russell 2000 index of smaller company stocks gave up 2.47 points, or 0.1%, to close at 1,906.46.

All of the major indexes except for the Dow are on pace for weekly gains after rallying Wednesday.

The price of U.S crude oil fell 2.3% to settle at $88.54 per barrel Thursday, weighing on energy company stocks. Exxon Mobil slid 4.2% and Occidental Petroleum fell 5.8%.

Health care stocks also lost ground. Eli Lilly dropped 2.6%.

Tech stocks and a mix of retailers, homebuilders and industrial companies made solid gains. Advanced Micro Devices climbed 5.9%, Amazon added 2.2%, Lennar rose 3.4% and Deere gained 1.7%.

Stocks have meandered this week, leaving major indexes mostly higher. August’s gain follows a standout July that was the S&P 500′s best month since late 2020. But markets remain volatile as investors try to determine the economy’s path ahead amid the highest inflation in four decades and efforts from central banks to fight higher prices.

Earnings remain in focus on Wall Street as investors look for more clues on how inflation is impacting various industries. Twinkie maker Hostess fell 3.9% after giving investors a disappointing profit forecast for the year. Bleach and consumer products maker Clorox fell 4.7% after also announcing a weak earnings forecast.

Companies have been raising prices on everything from food to clothing to help offset the impact of inflation on supply chains, but the pressure has become too much for many consumers. A surge in gasoline prices throughout the year worsened inflation and prompted spending cutbacks.

The Federal Reserve has been aggressively raising interest rates to try and slow the economy and fight inflation, along with other central banks. The Bank of England on Thursday initiated its biggest rate hike in more than a quarter century.

Recent economic data from retail sales and employment reports has shown that the economy is already slowing down.

“The cure for high inflation is sometimes high inflation,” Nixon said. “The narrative that we might have been at or past peak inflation is being validated by some of the data coming out.”

The surge in consumer demand and lack of supplies for many goods initially drove inflation. The resulting higher prices have now prompted consumers to ease off of spending. But, the Fed’s aggressive interest rate policy has investors concerned that the central bank could hit the brakes on the economy too hard and veer it into a recession.

That concern is being reflected by the bond market, where the yield on the two-year Treasury remains higher than the yield on the 10-year Treasury. It’s a relatively rare occurrence that some see as a precursor for a recession within a year or two.

The yield on the 10-year Treasury fell to 2.66% from 2.74% late Wednesday.

A bright point in the broader economy has been a strong employment market. New data from the Labor Department on Thursday showed the number of Americans applying for jobless benefits last week rose in line with expectations, as the number of unemployed continues to rise modestly.

The latest data follows updates earlier this week showing that job openings eased, but still remain at record highs. The Labor Department’s July jobs report on Friday is expected to show some signs of tightening.

Stocks gave back some of their recent gains Thursday as a choppy day of trading on Wall Street ended with a mixed finish for the major indexes.

The S&P 500 closed 0.1% lower after wavering between small gains and losses. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq rose 0.4%.

 

[bigdog]

Wall Street falls as jobs data suggests Fed hikes not over

Stocks are closing mostly lower Friday after new data on the hot U.S. jobs market suggested the Fed won’t soon rein in its aggressive rate hikes.

apnews.com

Wall Street falls as jobs data suggests Fed hikes not over​

By STAN CHOE, DAMIAN J. TROISE and ALEX VEIGA

NEW YORK (AP) — Stock indexes closed mostly lower Friday after a roller-coaster day following a blockbuster report on the U.S. jobs market that offered both good and bad news for Wall Street.

The benchmark S&P 500 ended just 0.2% lower after recovering from an early slide as investors reacted to the report, which showed that U.S. employers unexpectedly added hundreds of thousands more jobs than forecast last month.

The blistering data suggests the economy may not be in a recession, as feared. But it also undercuts investors’ speculation that a slowing economy may mean a peak for inflation soon. That means the Federal Reserve may not let up on its aggressive rate hikes to combat inflation as early as hoped. And much of Wall Street still revolves around expectations for rates.

“It’s a reminder for investors on how uncertain Fed policy is going forward and the strong jobs market data shows just how far the Fed has to go,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Stocks of technology and other high-growth companies once again took the brunt of the selling amid the rising-rate worries. The tech-heavy Nasdaq composite cut its early losses and closed down 63.03 points, or 0.5%, at 12,657.55.

The good news on the jobs market helped to limit losses for the Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy. It added 76.65 points, or 0.2%, to close at 32,803.47.

The S&P 500 slipped 6.75 points to end at 4,145.19. Both the S&P 500 and Nasdaq posted a gain for the week.

Beyond the nation’s strong hiring, wage growth for workers also unexpectedly accelerated last month. That’s helpful for households trying to keep up with the fastest price gains in 40 years. But it also raises worries on Wall Street that inflation will become more embedded in the economy.

Higher wages can cause companies to raise prices for their own products to sustain profits, which can lead to something economists call a “wage-price spiral.”

To be sure, some market watchers also pointed to numbers within Friday’s employment report suggesting the jobs market may not be as strong as the overall numbers imply. The number of people with multiple jobs rose by more than half a million, for example, said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

“That was mostly from people who already have a full time job and then the second job is part time,” he said. “Maybe this is more superficially impressive than substantively impressive.”

Wall Street’s clearest moves came from the bond market, where Treasury yields shot higher immediately after the release of the jobs data. The two-year Treasury yield, which tends to track expectations for Fed action, jumped to 3.23% from 3.05% late Thursday. The 10-year yield, which influences rates on mortgages, rose to 2.84% from 2.69%.

Wall Street is coming off the best month for stocks since late 2020, a rally driven mostly by what had been falling yields across the bond market. The hope on Wall Street had been that the economy was slowing enough to get the Fed to ease up on its rate hikes.

Higher mortgage rates had cut into the housing industry, in particular, after the Fed raised its short-term rates four times this year. The last two increases were triple the usual size, and the Fed has raised its benchmark overnight rate from nearly zero by 2.25 percentage points.

“Today’s print, coming in much stronger than anticipated, complicates the job” of the Federal Reserve, Rick Rieder, BlackRock’s chief investment officer of global fixed income, said in a statement. He said the assumption now becomes the Fed raising short-term rates by another 0.75 percentage points next month, unless next week’s highly anticipated report on inflation “shows some dramatic weakness, which seems highly unlikely at this point.”

Traders scrambled to place bets for bigger hikes coming out of the Fed’s next meeting. They have flipped their expectations from a day earlier and now largely expect the Fed to hike by 0.75 percentage points, instead of by half a point.

Such increases hurt investment prices in the near term, and they raise the risk of recession further down the line because they slow the economy by design.

12 Month Chart Dow Nasdaq S&P

 

[bigdog]

New York
Stock indexes closed mostly lower Friday after a roller-coaster day following a blockbuster report on the U.S. jobs market that offered both good and bad news for Wall Street.

 

[bigdog]

Asian shares mostly decline on global technology downturn

Asian shares are mostly declining amid a global fall in technology shares, including Japan’s SoftBank, which just reported hefty losses caused by the market downturn.

apnews.com

Wall Street ending flat as investors await inflation updates​

By DAMIAN J. TROISE and ALEX VEIGA

Major stock indexes on Wall Street gave up early gains and ended a choppy day of trading little changed Monday.

The S&P 500 and Nasdaq each slipped 0.1% after shedding gains of 1% and 1.6%, respectively. The Dow Jones Industrial Average closed 0.1% higher.

Small-company stocks outpaced the broader market in a sign that investors were confident about the economy. The Russell 2000 rose 1%.

The market’s latest gyrations came as investors prepare for a busy week of economic updates that could help answer whether the Federal Reserve’s efforts to cool the economy and quell inflation are working, or whether the central bank will continue aggressively raising interest rates. Wall Street is worried that the Fed could hit the brakes too hard and cause a recession.

“Early indications of inflationary pressures appear to be easing, which will be an important catalyst for the market,” said Quincy Krosby, chief global strategist for LPL Financial.

The S&P 500 fell 5.13 points to 4,140.06, while the Nasdaq slid 13.10 points to 12,644.46. The Dow added 29.07 points to close at 32,832.54. The Russell 2000 rose 19.38 points to 1,941.21.

The benchmark S&P 500 index is coming off three consecutive weekly gains. Investors remain focused on inflation and its impact on businesses and consumers, along with the Federal Reserve’s efforts to fight higher prices. The central bank has been aggressively raising interest rates to pump the brakes on economic growth and rein in record-high inflation. The Fed is expected to hike short-term interest rates by another 0.75 percentage points at its next meeting.

The Federal Reserve Bank of New York on Monday released a survey of consumer expectations from July showing that there were “substantial declines” in inflation expectations for everything from food and gas to home prices.

The Labor Department will release its July report for consumer prices on Wednesday, followed by its report for prices at the wholesale level on Thursday.

This week’s inflation updates follow reports last week showing the employment market remains strong. While that’s good for the economy, it has complicated the job of the Fed, which may be forced to continue with aggressive interest rate hikes intended to cool the economy and soaring inflation.

Investors are still reviewing the latest round of corporate earnings, which could also provide more details on how hard inflation is hitting consumers and businesses. Nvidia fell 6.3% for one of the biggest declines in the S&P 500 after it warned investors that its second-quarter revenue will fall short of forecasts because of weaker gaming revenue.

Generic drugmaker Viatris rose 3.7% after beating Wall Street’s second-quarter earnings and revenue forecasts.

Technology stocks were the biggest drag on the market Monday, outweighing modest gains in other sectors. Pricey stocks in the sector tend to push the market higher or lower with more weight. Microsoft fell 0.9%.

Retailers and communications stocks were among the biggest winners. Best Buy rose 2.8% and Facebook’s parent, Meta Platforms, rose 1.9%.

Clean energy companies gained ground following the Senate’s approval for Democrats’ big election-year economic package, which includes funding to help fight climate change. First Solar rose 4.7%.

Bond yields fell. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, slipped to 2.76% from 2.83% late Friday.

Major stock indexes on Wall Street gave up early gains and ended a choppy day of trading little changed Monday.

The S&P 500 and Nasdaq each slipped 0.1% after shedding gains of 1% and 1.6%, respectively. The Dow Jones Industrial Average closed 0.1% higher.

 

[bigdog]

Asian stocks fall ahead of US inflation

Asian stocks have followed Wall Street lower ahead of U.S. inflation data traders worry will show upward pressure on prices still is too strong for the Federal Reserve to ease off interest rate hikes.

apnews.com

Wall Street slips as weak earnings hit tech, travel stocks​

By DAMIAN J. TROISE and ALEX VEIGA
https://apnews.com/article/inflatio...70ae/gallery/d0ceedbee208410fa4ea14faee9965e2
Stocks on Wall Street extended their recent run of losses Tuesday as investors reviewed disappointing earnings reports and looked ahead to the release of an inflation snapshot closely watched by the Federal Reserve.

The S&P 500 fell 0.4%, marking its fourth consecutive drop. The Dow Jones Industrial Average fell 0.2% and the Nasdaq slid 1.2%.
Smaller company stocks also gave up ground, sending the Russell 2000 index 1.5% lower.

Technology companies and retailers were the biggest drags on the market, outweighing gains in energy, financials and elsewhere. Bond yields rose broadly.

The selling likely reflects profit-taking by investors ahead of Wednesday’s consumer price index report, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

The headline figure is expected to show a smaller annual increase in July than in June, according to FactSet. But core inflation, which strips out volatile energy and food costs, leaving rent and other big-ticket purchases, is expected to come in higher than in June.

“With core (inflation) being the more important of the two, the fact that it hasn’t peaked yet and may not peak for a few months to come, given how much momentum we’re seeing in rent increases, in wage increases, that’s going to be the real problem for the Fed,” Samana said. “How to cool that down, especially when the economy is adding as many jobs as it is?”

The S&P 500 fell 17.59 points to 4,122.47. The Dow slipped 58.13 points to close at 32,774.41. The Nasdaq dropped 150.53 points to 12,493.93. The Russell 2000 ended down 28.31 points at 1,912.89.

After a surprisingly strong 9.1% gain in July, the benchmark S&P 500 index has been mostly selling off this month as Wall Street tries to gauge how aggressively the Federal Reserve will continue to raise interest rates in order to combat inflation and what that will mean for the economy and corporate profits.

The U.S. Labor Department will release its July report for consumer prices Wednesday, followed by its producer prices report on Thursday. Investors and economists will look for any signs that the Federal Reserve’s aggressive rate hikes the past few months have helped to bring inflation under control.

“Regardless of that number, there’s still going to be an environment where they’re raising rates,” said Michael Landsberg, chief investment officer of Landsberg Bennett Private Wealth Management.

The Fed has raised rates four times this year in an effort to hit the brakes on the economy and cool the hottest inflation in four decades. Wall Street is worried that the central bank could slam the brakes too hard and tip the economy into a recession. Last week’s strong July jobs report has most economists predicting the Fed will again raise short-term interest rates by as much as another three-quarters of a point at its September meeting.

Most economic data already points to a slowdown. The U.S. economy has now contracted for two straight quarters, which constitutes an informal indicator of a recession. But recession fears have been tempered by a hot jobs market with unemployment at historic lows. While that’s good for the economy, it’s a sign that inflation persists.

Investors have also been closely watching the latest round of corporate earnings and economic data for clues on how inflation is hurting consumers and businesses.

Chipmaker Micron Technology fell 3.7% after warning investors that revenue could fall short of forecasts because of weakening demand. That warning hit other chipmakers hard, with Nvidia shedding 4%.

Norwegian Cruise Line plunged 10.6% for the biggest drop in the S&P 500 after reporting disappointing financial results and giving investors a weak revenue forecast. The weak results weighed down travel-related stocks. Expedia fell 1.6% and American Airlines fell 2.7%.

As the earnings season winds down, Disney, Wendy’s and Wynn Resorts will be reporting quarterly results this week.

Also on Tuesday, audience rating company Nielsen surged 21.2% after it announced progress on a deal to be acquired by private equity firms.

Bond yields rose. The yield on the 10-year Treasury rose to 2.79% from 2.75% late Monday.

Stocks on Wall Street extended their recent run of losses Tuesday as investors reviewed disappointing earnings reports and looked ahead to the release of an inflation snapshot closely watched by the Federal Reserve.

The S&P 500 fell 0.4%, marking its fourth consecutive drop. The Dow Jones Industrial Average fell 0.2% and the Nasdaq slid 1.2%.
Smaller company stocks also gave up ground, sending the Russell 2000 index 1.5% lower.

 

[bigdog]

Asian shares track Wall Street gains on cooling inflation

Shares have advanced in Asia after benchmarks closed at three-month highs on Wall Street as investors cheered a report showing inflation cooled more than expected in July.

apnews.com

Wall Street hits 3-month high as inflation cools​

By STAN CHOE and DAMIAN J. TROISE

NEW YORK (AP) — Stocks rallied to three-month highs on Wall Street Wednesday as investors welcomed a government report showing that inflation cooled more than expected last month.

The encouraging inflation update sparked speculation that the Federal Reserve may not have to remain as aggressive about hiking interest rates as feared. The central bank has been raising rates in an effort to slow the economy in the hopes of stamping out inflation, but that risks bringing on a recession if the Fed moves too aggressively.

The S&P 500 rose 87.77 points, or 2.1%, to 4,210.24. The gains broke a four-day losing streak and pushed the benchmark index to its highest levels since early May. It is now nearly 15% above its mid-June low.

The Nasdaq composite, whose many high-growth and expensive-looking stocks have been particularly vulnerable to interest rates, jumped 360.88 points, or 2.9%, to 12,854.80. It’s up more than 20% from June.

The Dow Jones Industrial Average rose 535.10 points, or 1.6%, to 33,309.51.

Technology stocks, cryptocurrencies and other of the year’s hardest-hit investments were some of the day’s biggest winners. Bitcoin rose 2.2% to just under $24,000.

Lower prices for gasoline and oil was responsible for much of last month’s inflation surprise. But even after ignoring that and volatile food prices, so-called “core inflation” held steady last month instead of accelerating as economists had forecast.

The data encouraged traders to scale back bets for how much the Fed will raise interest rates at its next meeting. They now see a hike of a half percentage point as the most likely outcome, according to CME Group. A day earlier, they were betting on a more aggressive hike of 0.75 percentage points, the same as the last two increases.

Such differences may not sound like much, but interest rates help set where prices go across financial markets. And higher rates tend to pull down prices for everything from stocks to commodities to crypto.

Prices for bonds soared immediately after the inflation report’s release, pulling their yields lower. The yield on the two-year Treasury, which tends to track expectations for the Fed, fell to 3.19% from 3.27% late Tuesday.

The 10-year yield initially fell, though stabilized later in trading. It edged higher to 2.79% from 2.78% late Tuesday. It remains below the two-year yield and many investors see such a gap as a fairly reliable signal of a coming recession

Recession worries have built as the highest inflation in 40 years squeezes households and corporations around the world. Wall Street is closely watching to see if the Fed can succeed in hitting the brakes on the economy and cooling inflation without veering into a recession.

“It’s a very knife edge type of path that they are trying to tread here,” said Brian Nick, chief investment strategist at Nuveen.

To be sure, inflation is still painfully high, and the expectation is for it to stay so for a while. But Wednesday’s data nevertheless rejuvenated Wall Street, which staggered following a stronger-than-expected jobs report on Friday that raised expectations for a more aggressive Fed. It bolstered hopes that a peak in inflation — and thus in the Federal Reserve’s most aggressive rate hikes — may be on the horizon.

“This is a step in the right direction but keep in mind we have many miles ahead of us before inflation normalizes,” said Mike Loewengart, managing director, investments strategy, at E-Trade from Morgan Stanley.

The Federal Reserve will get a few more highly anticipated reports before its next announcement on interest rates Sept. 21, which could also alter its stance. Those include reports showing hiring trends across the economy due Sept. 2 and the next update on consumer inflation coming on Sept. 13.

More immediately, reports this week will show how inflation is doing at the wholesale level and whether U.S. households are still ratcheting down their expectations for coming inflation, an influential data point for Fed officials.

Wednesday’s inflation data nevertheless helped stocks across Europe climb to modest gains, while markets that closed earlier in Asia were mostly down. Germany’s DAX returned 1.2%, Japan’s Nikkei 225 fell 0.6% and Hong Kong’s Hang Seng lost 2%.

On Wall Street, companies in the housing industry were strong on hopes that a less aggressive Fed could mean less pressure on mortgage rates. Homebuilder D.R. Horton gained 4.7%, PulteGroup rose 4.6% and Lennar was 3.6% higher.

Stocks rallied to three-month highs on Wall Street Wednesday as investors welcomed a government report showing that inflation cooled more than expected last month.

The S&P 500 rose 87.77 points, or 2.1%, to 4,210.24. The gains broke a four-day losing streak and pushed the benchmark index to its highest levels since early May. It is now nearly 15% above its mid-June low.

The Nasdaq composite, whose many high-growth and expensive-looking stocks have been particularly vulnerable to interest rates, jumped 360.88 points, or 2.9%, to 12,854.80. It’s up more than 20% from June.

The Dow Jones Industrial Average rose 535.10 points, or 1.6%, to 33,309.51.

 

[CityIndex]

The S&P 500 rose 87.77 points, or 2.1%, to 4,210.24. The gains broke a four-day losing streak and pushed the benchmark index to its highest levels since early May. It is now nearly 15% above its mid-June low.

The S&P500’s close above 4200 could be extremely significant as the index had been showing signs of topping out. However, the market now needs to build on this breakout to signal that this is a sustainable rebound.

Of course, all trading carries risk, and if SPX fails to overcome selling pressure around this key level over the remainder of the week, it could be exposed to deeper pullback.

 

[bigdog]

Asian shares mixed after new signs of cooling inflation

Shares are mixed in Asia after a muddled day on Wall Street, where benchmarks meandered following another encouraging report about inflation.

apnews.com

Stocks close mixed after new signs of cooling inflation​

By STAN CHOE and ALEX VEIGA

NEW YORK (AP) — An afternoon pullback left stock indexes on Wall Street with a mixed finish Thursday, erasing most of their gains from a morning rally over new signs of cooling inflation.

The S&P 500 closed 0.1% lower after having been up 1.1% in the early going. The Nasdaq fell 0.6%, while the Dow Jones Industrial Average eked out a 0.1% gain.

The indexes got a big boost early on following a report showing inflation at the wholesale level slowed more than economists expected last month. The report, which came a day after a cooler-than-expected reading on inflation at the consumer level, bolstered hopes among investors that inflation may be close to a peak and that the Federal Reserve will be less aggressive about raising interest rates than feared.

Even so, the morning rally didn’t hold. The selling coincided with a sharp upward move in bond yields and rising energy prices, which have been a central component of higher inflation.

“People stepped back and the inflation outlook isn’t that much different than what it was before,” said Willie Delwiche, investment strategist at All Star Charts. “There’s still a lot of work for the Fed to do. Maybe a little bit too much short-term euphoria kind of got in the market.”

Inflation is still painfully high, of course, and the economy has given false signals before that relief was on the way only for the rug to get pulled out from underneath investors. Some Fed officials also made comments after Wednesday’s inflation report suggesting their battle against rising prices is far from over. But enough hope for a peak in inflation and Fed aggressiveness has built that the S&P 500 has roughly halved its losses from earlier in the year, and it’s up more than 14% from its bottom in mid-June.

Technology stocks and other investments beaten down the most earlier in the year by the Fed’s aggressive rate hikes have been among the strongest, and the Nasdaq has climbed more than 20% from its low in June.

The S&P 500 slipped 2.97 points to 4,207.27 Thursday but it’s still on pace for a fourth consecutive weekly gain.

The Nasdaq fell 74.89 points to 12,779.91, and the Dow rose 27.16 points to 33,336.67. The Russell 2000 index of smaller companies rose 6.01 points, or 0.3%, to 1,975.26. The three indexes are also on pace for a weekly gain.

Technology and health care stocks were among the biggest weights on the S&P 500, keeping gains by energy companies, banks and other sectors in check.

The Walt Disney Co. jumped 4.7% after the entertainment company reported stronger profit for its latest quarter than analysts expected. It cited strong performance at its U.S. theme parks and announced price increases for its streaming services.

Companies whose profits most depend on a strong economy generally held up better. Energy stocks as a group rose 3.2% for the biggest gain among the 11 sectors that make up the S&P 500. They benefitted from rising prices of oil and natural gas. Shares of raw-material producers in the index gained 0.3%, and financial companies rose 1%.

Worries about a possible recession still loom over the market, as the Federal Reserve continues to raise interest rates to fight inflation. Such increases slow the economy by design, and some parts of the economy have already weakened under their weight, particularly the housing industry. But a resilient jobs market has offered a strong counterweight, leading to a muddied outlook for the economy.

A report on Thursday showed fewer U.S. workers filed for jobless claims last week than expected, a potentially encouraging sign about layoffs. But it was nevertheless the highest number since November.

Traders are now betting on the Fed to raise overnight interest rates by half a percentage point at its meeting next month. That’s down from the hike of 0.75 percentage points they were forecasting before Wednesday’s stunner of a report on inflation at the consumer level.

The Fed’s last two increases were by 0.75 points, accelerating from its two earlier hikes of the year, as the central bank upped its fight against high inflation. Even if the Fed can manage to slow the economy enough to stamp out inflation without causing a recession, higher interest rates pull downward on prices for all kinds of investments regardless.

Treasury yields mostly rose Thursday, after paring earlier losses. The 10-year yield rose to 2.89% from 2.79% late Wednesday, a big move.

It’s still below the two-year yield, which sits at 3.21%. That’s a relatively unusual occurrence that some investors see as a fairly reliable signal of a pending recession, though the gap between the two has narrowed somewhat.

In markets overseas, European stocks closed mixed, while Asian indexes were mostly higher.

In Thailand, the SET gave up 0.2% after the country’s central bank raised its benchmark interest rate by 0.25 percentage points to 0.75% a day earlier. The Southeast Asian country’s economy has been hard hit by the pandemic, which ravaged its all-important tourism sector.

An afternoon pullback left stock indexes on Wall Street with a mixed finish Thursday, erasing most of their gains from a morning rally over new signs of cooling inflation.

The Nasdaq fell 74.89 points to 12,779.91, and the Dow rose 27.16 points to 33,336.67. The Russell 2000 index of smaller companies rose 6.01 points, or 0.3%, to 1,975.26.

The S&P 500 slipped 2.97 points to 4,207.27 Thursday but it’s still on pace for a fourth consecutive weekly gain.

The Nasdaq fell 74.89 points to 12,779.91, and the Dow rose 27.16 points to 33,336.67.

 

[bigdog]

Wall Street extends winning streak to 4th week

Stocks are closing higher on Wall Street, giving the S&P 500 its first 4-week winning streak since November.

apnews.com

Wall Street extends winning streak to 4th week​

By DAMIAN J. TROISE and ALEX VEIGA

Wall Street capped a choppy week of trading with a broad stock market rally Friday, as the S&P 500 notched its fourth consecutive weekly gain.

The benchmark index closed 1.7% higher, for a 3.3% weekly gain. The S&P 500 hadn’t posted such a good stretch since November.

The Dow Jones Industrial Average rose 1.3%, while the Nasdaq and Russell 2000 index of smaller companies both closed 2.1% higher. Each index also posted a solid weekly gain.

Technology stocks drove much the rally. Crude oil prices fell and bond yields were mixed.

Trading was choppy much of the week, but major indexes got a big bump on Wednesday after a report showed that inflation cooled more than expected last month. Another report on Thursday showed inflation at the wholesale level also slowed more than expected.

The cooler-than-expected inflation readings have bolstered hopes among investors that inflation may be close to a peak and that the Federal Reserve could less aggressively hike interest rates, its main tool for fighting inflation.

“The data that we’ve gotten this week has all been consistent with the idea that we’re in the midst of peak inflation rates on a month-to-month basis,” said Scott Ladner, chief investment officer at Horizon Investments. “And that’s something that we’ve been waiting to see for months now. And it looks like, if that’s the case, then we’ve probably also seen peak Fed hawkishness.”

The S&P 500 rose 72.88 points to 4,280.15, while the Dow gained 424.38 points to 33,761.05. The Nasdaq added 267.27 points to 13,047.19.

Small-company stocks also made strong gains in a sign that investors are confident about the economy. The Russell 2000 rose 41.36 points to 2,016.62.

Around 95% of the stocks in the S&P 500 rose, with technology companies driving much of the rally. Chipmaker Nvidia rose 4.3%.

The central bank has been raising interest rates in the hopes of slowing the economy and cooling the hottest inflation in four decades, but investors are worried that it could hit the brakes too aggressively and steer the economy into a recession.

On Friday, a survey by the University of Michigan showed that consumer sentiment is stronger than economists expected. Still, inflation remains painfully high. That means the Fed is likely to remain on course with its rate hikes until it is certain that prices have peaked and are easing.

The Fed’s last two increases were by 0.75 percentage points. Traders now see about a 60% chance that the central bank will raise overnight interest rates by half a percentage point at its next meeting.

“The market’s strength is based on the assumption that inflation peaked and the Fed can relax, but that may be a bit too complacent,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.

The yield on the 10-year Treasury fell to 2.84% from 2.88% late Thursday. It remains below the two-year yield. That’s an unusual inversion of the expectation that borrowing money for a longer period should cost more than a shorter period. When investors demand a higher return for a short term like the 2-year than a longer one like 10 years, it’s viewed by some investors as a reliable signal of a pending recession. The economy has already contracted for two consecutive quarters.

Next week the Commerce Department releases its retail sales report for July and retail giant Walmart reports its latest financial results.

Investors can also assess the health of the housing market when they get a report on home sales for July and the latest earnings from Home Depot.

 

[bigdog]

Wall Street capped a choppy week of trading with a broad stock market rally Friday, as the S&P 500 notched its fourth consecutive weekly gain.

The benchmark index closed 1.7% higher, for a 3.3% weekly gain. The S&P 500 hadn’t posted such a good stretch since November.

The Dow Jones Industrial Average rose 1.3%, while the Nasdaq and Russell 2000 index of smaller companies both closed 2.1% higher. Each index also posted a solid weekly gain.

 

[bigdog]

Asian shares mostly higher, echoing Wall Street rebound

Asian shares are mostly rising after a rebound on Wall Street, despite regional investor risks reflected in negative economic data out of China.

apnews.com

Stocks end higher on Wall Street; economic worries hit oil​

By DAMIAN J. TROISE and ALEX VEIGA

Stocks on Wall Street bounced back from an early slide and closed higher Monday, extending the market’s recent winning ways as investors look ahead to several updates from retailers this week.

The S&P 500 rose 0.4% after having been down 0.5% in the early going. The benchmark index has risen for four straight weeks and is up 13.5% so far in the third quarter, although it’s still lower for the year.

The Dow Jones Industrial Average rose 0.5% and the Nasdaq gained 0.6%. Smaller company stocks also rose, sending the Russell 2000 index 0.2% higher.

The market got off to a bumpy start as traders reacted to news overnight that China’s central bank cut a key interest rate, acknowledging more needed to be done to shore up its economy. The move is the latest warning for markets already on edge over record-high inflation and fears about recessions in the U.S. and elsewhere.

China is the world’s second-largest consumer of crude oil, so the news weighed on energy prices. U.S. crude oil prices slumped 2.9% on worries about the global economy and weighed heavily on energy stocks. Chevron fell 1.9%.

Treasury yields fell as a report showed manufacturing in New York state unexpectedly contracted. The yield on the 10-year Treasury, which banks use to set mortgage rates, fell to 2.79% from 2.83% late Friday.

Some big banks fell as bond yields declined. Capital One slid 1.8%.

Still, all but two of the 11 sectors in the S&P 500 closed higher. Technology stocks, retailers and other companies that rely on direct consumer spending accounted for a big share of the gains. Visa rose 2.4% and Costco added 1.6%.

Moderna rose 3.3% after British regulators authorized an updated version of its COVID-19 vaccine.

All told, the S&P 500 rose 16.99 points to 4,297.14. The Dow added 151.39 points to 33,912.44. The Nasdaq gained 80.87 points to 13,128.05. The Russell 2000 rose 4.73 points to 2,021.35.

The market’s choppy start to the week follows four straight weeks of gains for the benchmark S&P 500 on hopes that inflation is peaking and that the Federal Reserve could ease up on its aggressive interest rate hikes. The central bank has been raising short-term interest rates to help slow economic growth and cool the hottest inflation in 40 years.

Wall Street is worried that the Fed could hit the brakes too hard and send the economy into a recession, and any signal that inflation could be peaking or retreating has helped ease some of those worries.

Investors are also keeping a close watch on how inflation is affecting businesses and consumers. Spending has slowed and the broader economy has already contracted for two straight quarters. Several big retailers will give investors more detail on how their businesses are holding up when they report earnings this week.

Home Depot and Walmart report their results on Tuesday and Target’s results are due on Wednesday. On July 26, the S&P 500 fell more than 1% after Walmart warned that inflation was hurting its customers’ spending power and said its second-quarter profit would be lower than previously forecast.

Wall Street will get another look at the health of the retail sector and consumer spending when the Commerce Department releases its July retail sales report on Wednesday. Economists surveyed by FactSet expect modest 0.2% growth from June, when sales rose 1%. That increase largely reflected higher prices, particularly for gas. But it also showed that Americans continue to spend, providing crucial support for the economy, though some economists suggest it’s mostly coming from higher-income households.

The S&P 500 rose 0.4% after having been down 0.5% in the early going. The benchmark index has risen for four straight weeks and is up 13.5% so far in the third quarter, although it’s still lower for the year.

The Dow Jones Industrial Average rose 0.5% and the Nasdaq gained 0.6%. Smaller company stocks also rose, sending the Russell 2000 index 0.2% higher.

 

[bigdog]

Asian shares rise on optimism about US, China economies

Asian shares are mostly higher as regional markets looked to strong economic signs out of the U.S. and China as drivers of growth.

apnews.com

After another bumpy day, Wall Street ends mostly higher​

By DAMIAN J. TROISE and ALEX VEIGA

Another choppy day of trading on Wall Street ended Tuesday with a mostly higher finish for stocks that adds to the market’s recent string of gains.

The S&P 500 rose 0.2%, its third straight gain. The Dow Jones Industrial Average rose 0.7%, extending its winning streak to a fifth day. The Nasdaq slipped 0.2%.

Bond yields gained ground. The yield on the 10-year Treasury rose to 2.81% from 2.79% late Monday.

The market’s latest gyrations came as traders cautiously reviewed mostly encouraging financial results from major retailers.

Walmart jumped 5.1% and after the nation’s largest retailer reported strong results that easily topped analysts’ forecasts. Home Depot rose 4.1% after also reporting better-than-expected results. The gains from both companies did much of the heavy lifting for the Dow.

Technology, health care and energy stocks fell, limiting the broader market’s advance. Broadcom fell 1.3%, Moderna slid 5% for the biggest drop in the S&P 500 and Marathon Oil fell 1.1%.

Retailers, consumer product makers and banks made solid gains.

In all, the S&P 500 rose 8.06 points to 4,305.20. The Dow gained 239.57 points to 34,152.01. The Nasdaq fell 25.50 points to 13,102.55.

Smaller company stocks edged lower. The Russell 2000 slipped 0.82 points, or less than 0.1%, to 2,020.53.

U.S. crude oil prices fell 3.2%. European markets ended broadly higher and Asian markets closed mixed overnight.

Stocks had their best month in a year-and-a-half in July and the winning streak has been continuing into August partially on hopes that inflation is easing. The latest government report on consumer prices showed that inflation essentially stalled from June to July.

Still, trading has been choppy, with major indexes swaying between gains and losses throughout each day.

The bumpy trading reflects at least partly a surge in “dip buyers,” or investors swooping in to buy stocks that have traded lower, said Randy Frederick, managing director of trading & derivatives at Charles Schwab.

“The dip buyers were just absent in the first half of the year, and whenever they did step in they got spanked every time,” he said. “That has changed now.”

Frederick points to momentum in the market right now.

“Clearly the easier direction is to the upside at this point, but that doesn’t mean we won’t have another pullback,” he said.

The latest results from retailers show that spending remains solid, even as consumers face the hottest inflation in 40 years. Wall Street has been concerned that higher prices on everything from food to clothing could eventually stunt the economy’s main engine of growth, consumer spending. Investors will get more updates on the retail sector this week, when Target reports its results on Wednesday.

The Commerce Department releases its July retail sales report on Wednesday. Economists surveyed by FactSet expect modest 0.2% growth from June, when sales rose 1%.

The retail reports are capping off the latest round of corporate earnings, which have been closely watched by investors trying to determine inflation’s impact on businesses and consumers, while trying to gauge how Federal Reserve will react. The central bank is raising interest rates in an effort to slow down economic growth and rein in inflation, though it risks hitting the brakes too hard and veering the economy into a recession.

Investors are looking for any signs that inflation is peaking or cooling in the hopes that the Fed could ease its aggressive rate hike policy. The central bank in July raised its benchmark interest rate by three-quarters of a point for a second straight time. On Wednesday, Wall Street will get more details on the process behind that decision when the Fed releases minutes from that meeting.

Investors currently expect a half-point increase at the Fed’s upcoming meeting in August, according to CME’s FedWatch tool.

The S&P 500 rose 0.2%, its third straight gain. The Dow Jones Industrial Average rose 0.7%, extending its winning streak to a fifth day. The Nasdaq slipped 0.2%