US stocks edge mostly higher ahead of midterm elections
NEW YORK, Nov 7, (AP): US stocks edged higher, but were unsettled in midday trading on Wall Street Monday as campaigning winds down for midterm elections in the U.S. that will determine which party controls Congress.
The S&P 500 rose 0.1% as of 11:48 a.m. Eastern. The Dow Jones Industrial Average rose 169 points, or 0.5%, to 32,565 and the Nasdaq fell 0.2%.
Apple fell 1.1% after the company warned customers they’ll have to wait longer to get the latest iPhones after anti-virus restrictions were imposed on a contractor’s factory in China. Facebook’s parent company rose 5.3% after the Wall Street Journal reported that the company plans to make a big round of layoffs this week.
Cruise lines and other travel-related companies fell. Norwegian Cruise Line, which reports financial results Tuesday, slipped 2.8%.
Bond yields rose. The yield on the 10-year Treasury rose to 4.21% from 4.16% late Friday. The yield on the two-year Treasury rose to 4.74% from 4.66%.
Tuesday’s election will decide control of Congress and key governorships. History suggests the party in power may suffer losses in the midterms, and decades-high inflation has become a significant issue for the Democrats.
Inflation
Stubbornly hot inflation and the Federal Reserve’s policy of raising interest rates to fight it remains the big concerns for Wall Street. Investors will get an important update on inflation Thursday when the U.S. government releases its report on consumer prices for October.
The update on prices will show where consumers are getting squeezed by inflation. More importantly, it could give investors more insight into the Fed’s path ahead for fighting inflation, said Keith Buchanan, portfolio manager at Globalt Investments.
“It boils down to one question,” he said. “What impact has the tightening from the Fed had on inflation?”
The central bank has signaled that it might slow the pace of its rate increases as it determines the impact from its policy so far. The Fed has also said that it might have to ultimately raise rates higher than previously anticipated if inflation persists. The policy has raised concerns that the Fed could go too far in slowing the economy and bring on a recession.
“The lags are different each cycle and for different reasons and we just don’t know when the tightening will have the impact that was intended,” Buchanan said.
The latest round of corporate earnings have provided mixed financial results and warnings from companies about inflation’s impact on operations and demand for goods and services. Several big companies will report results this week, including Walt Disney on Tuesday.
Markets gained ground in Asia amid continued speculation of a possible relaxation of China’s zeroCOVID strategy, though there has been no official confirmation in China of a major change.
European markets were mostly higher.
Europe
In Europe at midday, Germany’s DAX jumped 0.9%, while France’s CAC 40 picked up 0.2% and Britain’s FTSE 100 rose retreated 0.2%.
Asia
Speculation late last week about a possible relaxation of China’s zeroCOVID strategy has had a huge impact on markets. On Monday, Hong Kong’s Hang Seng index gained 2.7% to 16,595.91 and the Shanghai Composite rose 0.2% to 3,077.85.
There has been no official confirmation in China of a major change.
“Over the weekend, Beijing has dashed hopes of China re-opening in the horizon, by reasserting of zeroCOVID policies. And this could induce fresh caution,” Tan Boon Heng at Mizuho Bank in Singapore said in a report.
Also in China, the government reported its trade shrank in October as global demand weakened and antivirus controls weighed on domestic consumer spending. Exports declined 0.3% from a year earlier, down from September’s 5.7% growth, the customs agency reported Monday. Imports fell 0.7%, compared with the previous month’s 0.3% expansion.
Economists have been forecasting that the world’s second-largest economy’s trade will slow as global demand cools following interest rate hikes by the Federal Reserve and other central banks to rein in surging inflation.
Japan’s benchmark Nikkei 225 jumped 1.2% to finish at 27,527.64. Australia’s S&P/ASX 200 gained 0.6% to 6,933.70. South Korea’s Kospi gained nearly 1.0% to 2,371.79.
Shares rose in Taiwan and but edged lower in India.
In energy trading, benchmark U.S. crude fell 94 cents to $91.67 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 83 cents to $97.74 a barrel.
Currencies
In currency trading, the U.S. dollar declined to 146.59 Japanese yen from 146.92 yen. The euro rose to 99.80 cents from 99.60 cents.