Wall Street Stocks open lower; Dow fell 0.9%
Newslooks- NEW YORK (AP)
Stocks are opening lower on Wall Street as results continued to come in for midterm elections in the U.S., with control of the Congress still undetermined. The S&P 500 gave up 0.9% in early trading Wednesday following three straight gains. The Dow Jones Industrial Average also fell 0.9% and the Nasdaq was off 1%. Disney slumped 10% after reporting results that fell well short of what analysts were looking for. Facebook’s parent company, Meta Platforms, rose sharply after announcing its first major round of layoffs. A closely watched report on U.S. inflation data is due out Thursday.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. markets were close to flat before the bell Wednesday as results of the U.S. midterm elections continued to come in with control of Congress hanging in the balance.
Futures for the benchmark S&P 500 were 0.5% lower, and futures for the Dow Jones Industrial Average also dipped 0.5%.
Shares of Facebook’s parent Meta rose more than 4% in premarket after the social media giant said it is laying off 11,000 employees, about 13% of its workforce. The cuts at Meta, whose revenue has declined for two straight quarters, come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk.
With votes from the U.S. midterms still being counted across the country, Republicans remained hopeful to win control of Congress. But Democrats showed surprising strength, defeating Republicans in some competitive races despite expectations that inflation and President Joe Biden’s low approval ratings would drag the party down.
The elections could determine how much is done in the next several years in Washington, and possibly beyond. If Republicans gain control of at least one house of Congress, standoffs with the Democratic White House could stymie progress on legislation.
Bitcoin slumped to around $17,465 overnight, its lowest level in almost two years. Most of the cryptocurrency sector followed bitcoin’s slide, one day after the world’s biggest crypto exchange, Binance, said that it plans to buy its rival FTX Trading in what amounts to a bailout.
Shares of publicly traded companies with heavy exposure to crypto were also down in premarket after falling sharply on Tuesday. Coinbase was down 5% before the bell, while Robinhood Markets fell 2% and MicroStrategy slid 6%.
In Europe at midday, Germany’s DAX had fallen 0.5%, while both the CAC 40 in Paris and the FTSE 100 in London shed 0.3%.
Chinese shares declined after weak inflation data provided further evidence of weakening demand in the world’s second-largest economy.
China’s government reported consumer price inflation eased to 2.1% in October from 2.8% in September. Producer price inflation (PPI) dropped into deflationary territory, falling to minus 1.3% from 0.9% in October, the 21st straight month in an even stronger sign that the No. 2 economy is slowing.
“China inflation data printed a rather gloomy picture, with PPI remaining deflationary and CPI much weaker than expected, pointing to waning demand,” Stephen Innes of SPI Asset Management said in a commentary.
In Asian trading, Tokyo’s Nikkei 225 index slipped 0.6% to 27,716.43 after the Cabinet on Tuesday approved a 29.1 trillion yen ($190 billion) supplementary budget to fund planned economic stimulus for the world’s third-largest economy.
Hong Kong’s Hang Seng lost 1.2% to 16,358.52 and the Shanghai Composite index shed 0.5% to 3,048.17.
In Seoul, the Kospi gained 1.1% to 2,424.41, while Australia’s S&P/ASX 200 rose 0.6% to 6,999.30.
A more important milestone for markets this week than the election may be Thursday’s report on inflation, which will affect the interest-rate hikes the Federal Reserve is pushing through to get it under control.
By raising rates, the Fed is intentionally slowing the economy by making it more expensive to borrow money. High rates also tend to drag down prices for stocks and other investments while raising the risk of a recession.
The Fed has already hiked its key overnight rate to a range of 3.75% to 4%, up from virtually zero in March, and more investors are expecting it to top 5% next year.
A softer reading than expected on Thursday could give the Fed leeway to loosen up a bit. Economists expect the report to show a continued, slight moderation from a peak set during the summer. But a worse-than-expected reading could have the opposite effect.
In other trading Wednesday, U.S. benchmark crude oil slid $1.45 to $87.46 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international pricing standard, lost $1.50 to $93.86 per barrel in London.
The dollar inched up to 145.78 Japanese yen from 145.65 yen. The euro fell to $1.0045 from $1.0076.
Tuesday on Wall Street, the S&P 500 rose 0.6%, while the Dow Jones Industrial Average climbed 1%. The Nasdaq composite gained 0.5%.
