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Financial Markets 09/24 15:41
NEW YORK (AP) -- After whipping through a couple sudden reversals, stocks
ended a shaky day of trading on Wall Street Thursday roughly where they began.
The S&P 500 finished nearly flat and edged down by less than 0.1% following
several turns between losses and gains. The Dow Jones Industrial Average
dropped 161 points, or 0.3%, and the Nasdaq composite added less than 0.1%.
Stocks have
https://apnews.com/article/stocks-markets-trump-iran-us-6a3b530d3c1df18029956016
203ae52e since the S&P 500
https://apnews.com/article/stocks-markets-rates-oil-energy-trump-xi-1f1a267bf455
6c01513f506914eb6359 of
https://apnews.com/article/stock-markets-ai-semiconductors-fed-energy-3a23f22469
cd0e0062f711096906525c earlier this week as pressure from
https://apnews.com/article/bonds-rates-yields-wall-street-7d3ce7fdda0fd58afbeaf6
1293810a0c has cranked higher.
The yield on the 10-year Treasury jumped to 5.20% from 5.11% late Wednesday
and is back to where it was in 2007. High yields slow the overall economy by
making it
https://apnews.com/article/mortgage-interest-rate-30year-fb5f426270e80a7fd64264d
489efeeec while also undercutting prices for stocks and other investments.
Yields climbed through the morning, which pushed stocks downward, until they
took a sudden turn lower in the midday hours. The 10-year yield dropped from
nearly 5.17% to less than 5.13% in about 20 minutes before ultimately turning
higher again.
Yields once again were following the track of oil prices, which have been
scattershot because of uncertainty about when the war with Iran will allow
crude oil to flow freely again from the Middle East.
The price for a barrel of Brent crude in the most actively traded part of
the market went from $102 to roughly $99 in a matter of minutes midday
Thursday. It later rose to settle at $100.22, up 2.1% from the prior day.
It's not just worries about expensive oil and inflation that have sent
Treasury yields higher. The U.S. economy continues to expand, which also
supports yields.
On Thursday, a report showed
https://apnews.com/article/jobs-unemployment-claims-layoffs-91d99d8ff50cd5aea33a
858c677976d5 last week and further strengthened expectations for the economy.
Such numbers could convince the Federal Reserve that the economy can
withstand more hikes to short-term interest rates. The Fed
https://apnews.com/article/federal-reserve-warsh-trump-inflation-bab1bcb07e973bf
b2dd0c3e5fbbb73b1 last week for the first time in three years in hopes of
slowing the economy and removing some of the fuel for inflation.
Traders now see better than a coin flip's chance that the Fed could raise
rates twice more by the end of the year, according to data from CME Group.
So far, the solid overall economy has helped U.S. companies continue to
deliver strong growth in profits. That in turn has helped their stock prices
remain relatively strong despite worries about war, inflation and tariffs.
"The headlines have turned more ominous, but the underlying drivers of
growth remain intact," strategists at Barclays wrote in a report. "As long as
AI-related investment, US corporate profitability, and consumer spending
continue to beat expectations, the economy and markets seem capable of
absorbing tighter central banks and higher rates."
Stitch Fix became one of the latest U.S. companies late Wednesday to report
better quarterly results than analysts expected. But its stock nevertheless
tumbled 21.6% after it said "a more challenging consumer environment" could
hold back its revenue growth this upcoming fiscal year.
Darden Restaurants, the company behind Olive Garden and LongHorn Steakhouse,
fell 3% after reporting a profit for the latest quarter that matched analysts'
expectations.
High yields in the bond market hurt prices for all kinds of stocks, and they
often hit hardest on those seen as the most expensive. That puts the target on
AI stocks, which soared for years in the frenzy around the technology.
Higher yields also make it more expensive for companies to borrow money to
build AI data centers, which could slow their construction and restrain demand
for AI chips.
Nvidia slipped 0.4% and was the heaviest weight on the S&P 500.
On the winning side of Wall Street was Everpure. The data storage and
management company's stock jumped 11.2% after it stood by its financial
forecasts for this fiscal year and said it expects revenue growth to accelerate
in the following one.
All told, the S&P 500 fell 1.90 to 7,704.13 points. The Dow Jones Industrial
Average dropped 161.61 to 51,349.98, and the Nasdaq composite rose 3.34 to
26,939.37.
In stock markets abroad, indexes fell modestly around much of the world. A
drop of 1.2% in Shanghai and gain of 0.8% in Tokyo were two of the bigger moves.
___
AP Business Writer Yuri Kageyama contributed to this report.
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