US stocks remain mixed amid earnings & economic updates
NEW YORK, Aug 4, (AP): US stocks were mixed in morning trading on Wall Street Thursday as investors continued to review the latest updates on the economy and corporate earnings.
The S&P 500 fell 0.1% as of 10:16 a.m. Eastern. The Dow Jones Industrial Average fell 52 points, or 0.2%, to 32,760 and the Nasdaq rose 0.1%.
Oil prices edged lower and weighed on energy stocks. Exxon Mobil fell 1.8%. A mix of retailers and industrial companies made solid gains. Best Buy rose 1.9% and Deere rose 1.6%.
The yield on the 10-year Treasury fell to 2.69% from 2.74% late Wednesday.
Stocks have meandered 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 5% after giving investors a disappointing profit forecast for the year. Bleach and consumer products maker Clorox fell 4.2% after also announcing a weak earnings forecast.
Impact of inflation
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 temper inflation, along with other central banks. The Bank of England on Thursday initiated its biggest rate hike in more than a quarter century.
The Fed’s policy has investors concerned that the central bank could hit the brakes too hard and veer the economy into a recession.
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 remain at record highs. On Friday, the Labor Department delivers its July jobs report, which is expected to show some signs of tightening.
Investors are closely watching the latest jobs data to gauge whether any tightening in the employment market might
prompt the Fed to eventually ease up on its interest rate hikes, potentially lessening the chance of the central bank bringing on a recession.
Europe
Shares in Europe eased back somewhat by midday from bigger early gains after the Bank of England initiated its biggest rate hike in more than a quarter century said the United Kingdom’s economy is projected to enter a recession in the final three months of the year.
The bank said Thursday that inflation will accelerate to over 13% in the fourth quarter and remain “very elevated,” for much of 2023. The forecast reflects a sharp increase from the 9.4% rate recorded in June.
The bank’s forecasters say inflation will hit its highest point for more than 42 years amid the doubling of wholesale gas prices stemming from Russia’s invasion of Ukraine. Energy prices will push the economy into a five-quarter recession, with gross domestic product shrinking each quarter in 2023, the bank said.
France’s CAC 40 added 1% in midday trading, while Germany’s DAX gained 1.1%. Britain’s FTSE 100 rose 0.5%.
Asia
In Asia, Japan’s benchmark Nikkei 225 finished 0.7% higher to finish at 27,932.20. Australia’s S&P/ASX 200 lost earlier gains, shedding just 1 point to 6,974.90. South Korea’s Kospi added 0.5% to 2,473.11. Hong Kong’s Hang Seng rose 2.1% to 20,174.04, while the Shanghai Composite climbed 0.8% to 3,189.04.
India’s Sensex lost 0.6% and the Taiex in Taiwan also fell 0.5%.
Oil
Oil prices rose modestly following OPEC’s decision to boost production in September at a much slower pace than previous months. Benchmark U.S. crude added 41 cents to $91.01 a barrel. On Wednesday, U.S. crude oil fell 4% to settle at $90.66 per barrel. Brent crude, the international standard, gained 6 cents to $96.84 a barrel.
Currencies
In currency trading, the U.S. dollar edged up to 134.24 Japanese yen from 133.85 yen. The euro cost $1.0166, little changed from $1.0170.