Wall Street’s main indexes opened lower on Thursday as fresh data underscored strength in the U.S. economy and aggravated concerns over the Federal Reserve’s continued policy tightening. A short-lived bounce for global stocks faded on Thursday, as easing U.S. inflation expectations were overshadowed by fears about an economic downturn. Futures markets indicated Wall Street’s benchmark S&P 500 share index would drift 1.2% lower at the opening bell, having gained 1.5% in the previous session. Contracts on the tech-focused Nasdaq 100 also fell 1.8%. The Associated Press has the story:
Stocks open lower, giving back the prior day’s gain
Newslooks- NEW YORK (AP)
Stocks are opening lower on Wall Street, giving back a good chunk of the gains they made a day earlier. The early losses put most major US indexes back in the red for the week. The S&P 500 lost 1.2% early Thursday and the Nasdaq composite gave back 1.8%. The Dow Jones Industrials lost 1%. Used car seller CarMax sank 8% after reporting results for its latest quarter that came in far below what analysts were expecting. The government raised its estimate for U.S. economic growth in the third quarter to a surprisingly strong 3.2%. Treasury yields rose slightly.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Markets on Wall Street trended modestly lower before the bell early Thursday as the last economic reports of the year trickle in, including a final reading on inflation, which has dogged the the U.S. economy for nearly two years.
Futures for the S&P 500 and the Dow industrials were down 0.2%. World markets were mixed and oil prices rose.
Investors are awaiting Thursday data releases from the U.S. government on gross domestic product and applications for unemployment aid, with an important report on inflation and consumer spending coming Friday. The report is monitored by the Fed as a barometer of inflation, which has been easing, albeit at a slow pace. Economists expect the report to show inflation cooled in November.
Markets got a boost from a report Wednesday showing U.S. consumer confidence is surprisingly strong, despite inflation squeezing wallets. The Conference Board’s consumer confidence index rose to 108.3 in December from 101.4 in November, pushing the index to its highest level since April.
Consumer spending and the job market are strong areas for the U.S. economy that have helped prevent it from slipping into a recession. Wall Street is hoping for a “soft landing” from decades high inflation and the interest rate hikes being deployed by the Federal Reserve to tame it.
The Fed’s key lending rate, the federal funds rate, stands at a range of 4.25% to 4.5%, the highest level in 15 years. Fed policymakers are forecasting the rate will reach a range of 5% to 5.25% by the end of 2023 and won’t be cut before 2024.
If the Fed goes too far in raising interest rates, it could cause the economy to stall more than planned and tip into recession.
Asian markets also got a lift from the overnight rally in tech shares, which spilled into trading in Hong Kong. E-commerce giant Alibaba jumped 4.1% while online services company Tencent gained 4.1%. Online shopping and food delivery platform Meituan picked up 6.9%.
Hong Kong’s Hang Seng index gained 2.7% to 19,679.22, while the Shanghai Composite index fell 0.5% to 3,054.43.
“Asian stocks picked up where the U.S. market left off, with technology and property companies leading the charge after a profusion of comments from regulators on supporting broader markets,” Stephen Innes of SPI Asset Management said in a commentary.
Tokyo’s Nikkei 225 closed 0.5% higher at 26,507.87 and the Kospi in Seoul rose 1.2% to 2,356.73. In Sydney, the S&P/ASX 200 advanced 0.5% to 7,152.50.
Bangkok’s SET gained 0.2% while the Taiex in Taiwan climbed 1.2%.
In Europe, Germany’s DAX edged 0.1% lower to 14,081.26. The CAC 40 in Paris also lost 0.1%, to 6,578.93. Britain’s FTSE 100 rose 0.4%, to 7,525.54.
Treasury yields mostly fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.65% early Thursday from 3.66% late Wednesday.
In energy trading Thursday, U.S. benchmark crude oil added $1.30 to $79.59 per barrel in electronic trading on the New York Mercantile Exchange. It picked up $2.06 to $78.29 per barrel on Wednesday.
U.S. inventory data showed the Strategic Petroleum Reserve falling to 378.6 million barrels, its lowest level since 1983, thanks to a larger-than-expected draw down last week. That overrode worries about weak demand due to the slowing economy, pushing prices higher.
Brent crude, the pricing basis for international trading, gained $1.38 to $83.96 per barrel.
The U.S. dollar slipped to 132.09 Japanese yen from 132.42 yen. The euro rose to $1.0638 from $1.0606.
Stocks closed broadly higher on Wall Street Wednesday, bringing major indexes into the green for the week after two straight weeks of losses.
The S&P 500 jumped 1.5%, while the Dow Jones Industrial Average advanced 1.6%. The tech-heavy Nasdaq composite rose 1.5%. The Russell 2000 small caps index rose 1.7%.
