Trading is mixed on Wall Street early Wednesday as more corporate earnings reports stream in ahead of a highly-anticipated update on U.S. inflation later this week. Futures for the Dow rose 0.3%, while the S&P 500 fell 0.2% before the opening bell. The tech-heavy Nasdaq fell 0.4%.
The Associated Press has the story:
Wall Street mixed as more earnings roll in ahead of inflation data
Newslooks- New York (AP)
Trading is mixed on Wall Street early Wednesday as more corporate earnings reports stream in ahead of a highly-anticipated update on U.S. inflation later this week.
Futures for the Dow rose 0.3%, while the S&P 500 fell 0.2% before the opening bell. The tech-heavy Nasdaq fell 0.4%.
As the pace of profit reports picks up, the hope is that companies will report their first growth in a year. Such strength is crucial for stock markets, which have slumped under the weight of higher bond yields.
The 10-year Treasury yield has been rising rapidly from less than 3.5% in the spring and catching up with the Federal Reserve’s main overnight interest rate, which is at its highest level since 2001, above 5.25%. The Fed has been cranking up its benchmark lending rate in a bid to quash entrenched inflation.
On Friday, the Commerce Department releases its consumer spending report, which contains a measure of inflation that is closely watched by the Fed. That report could play into the central bank’s next interest rate decision when it meets next week.
High yields hurt prices for stocks, cryptocurrencies and other investments. They also slow the economy bluntly and add stress for the entire financial system.
The 10-year Treasury yield was steady at 4.86% early Wednesday.
Microsoft shares got a boost from its latest earnings report, which showed a 27% increase in profit for the July-September quarter compared to the same time last year. Those earnings were powered by growth in the software giant’s cloud computing division, where it has centered its investments in artificial intelligence. Microsoft shares climbed 4.4% early Wednesday.
On the other end of that was Google, which reported lower-than-expected revenue from its cloud division, sending its shares tumbling 6.2% before the bell.
Boeing shares rose 3% before markets opened, even as the aircraft maker posted a $1.64 billion loss for the third quarter and lowered its forecast for the number of 737 Max planes it will deliver this year due to production problems.
Facebook parent company Meta Platforms reports after the bell Wednesday.
The overall economy has so far remained remarkably resilient in the face of much higher interest rates. A solid job market and spending by U.S. households has helped keep the economy chugging along.
But some investors worry that even if interest rates and yields climb no further, they’re still high enough to eventually drag the economy into a recession if the Fed holds pat.
Strong data reports recently have driven expectations for the U.S. economy’s growth in the third quarter of the year sharply higher. Economists at Goldman Sachs, for example, have raised their forecast for the quarter’s growth to 4.6% from just 1.5% in mid-August.
While such strength has prevented a recession, it could also be fueling inflation, encouraging the Fed to keep rates high for longer. That in turn could lead to more weakness in the future.
The Commerce Department issues its first estimate of U.S. gross domestic product on Thursday.
In Tokyo, the Nikkei 225 index gained 1.3% to 31,466.92. Hong Kong’s Hang Seng jumped 1.8% to 17,290.91 and the Shanghai Composite index was up 0.5% at 2,977.84.
South Korea’s Kospi slipped 0.4% to 2,373.88, while the S&P/ASX 200 in Sydney was flat at 6,856.60. India’s Sensex dropped 1.3% and the SET in Bangkok was up 1.2%.
In Europe at midday, Britain’s FTSE 100 rose slightly to 27572.74, Germany’s DAX is also up a touch at 14910.15, as is France’s CAC 40, which hit 6904.36.
In the oil market, prices have dipped recently, taking some more pressure off inflation. On Wednesday, they edged higher. A barrel of benchmark U.S. oil was up 27 cents at $84.01. On Tuesday, it dropped $1.75 to settle at $83.74.
Brent crude, the international standard, gained 46 cents early Wednesday to $87.61 per barrel. It fell $1.76 Tuesday to $88.07 per barrel.
U.S. oil had been above $93 last month, and it’s bounced up and down since then amid concerns that the latest Hamas-Israel war could lead to disruptions in supplies from Iran or other big oil-producing countries.
In currency dealings, the U.S. dollar bought 149.92 Japanese yen, up from 149.85 yen. The euro was at $1.0575, down from $1.0596.
On Tuesday, the S&P 500 climbed 0.7% to break a five-day losing streak. The Dow Jones Industrial Average gained 0.6% and the Nasdaq composite rose 0.9%.
