Stock market today: Wall Street stagnates as indices approach records
NEW YORK– American stock indices drift Thursday following discouraging data on the economy.
THE&The P 500 slipped 0.2%, potentially on course for its third loss in the last four days. This would count as a failure in the midst of a big rally that carried the index toward closing one of its the best years of the millennium.
The Dow Jones Industrial Average fell 71 points, or 0.2%, as of 12:32 p.m. Eastern Time, and the Nasdaq composite fell 0.3% from its record high set the day before.
A report earlier in the morning said more American workers filed for unemployment benefits last week than expected. Meanwhile, a separate update showed that inflation at the wholesale level, before it reaches U.S. consumers, was stronger last month than economists expected.
Neither report indicates impending disaster, but they dash one of the S’s hopes.&500 P to 57 all-time highs so far this year: Inflation slows enough to convince the Federal Reserve to continue cutting interest rates, while the economy remains strong enough to avoid a recession.
Of the two reports, the weaker labor market update could be the bigger deal for the market, according to Chris Larkin, managing director of trading and investments at E-Trade at Morgan Stanley. A rise in egg prices could be behind the worse-than-expected inflation figures.
“One week does not undo what has been a relatively steady stream of strong labor market data, but the Fed is prepared to be sensitive to any signs of a slowdown in the employment situation,” he said. he declared.
Traders consider it a near certainty that the Fed will cut its main interest rate at its meeting next week. If they are correct, this would be a third consecutive reduction by the Fed after this one. started lowering rates in September a two-decade high. He hopes to support a labor market slowdown after bringing inflation almost back to its 2% target.
Lower interest rates would boost the economy and investment prices, but they could also fuel further inflation.
A cut next week would cause the Fed to follow the lead of other central banks, which eased rates on Thursday. THE The European Central Bank cuts rates by a quarter of a percentage point, as many investors had hoped, and the Swiss National Bank cut its key rate by an even steeper half of a percentage point.
Following its decision, the Swiss Central Bank highlighted uncertainty over the impact of US President-elect Donald Trump’s victory on economic policy, as well as the political direction in Europe.
Trump spoke rates and other policies it could disrupt global trade. He rang the bell marking the start of the exchanges at the New York Stock Exchange on Thursday to the singing of “USA”.
On Wall Street, Adobe fell 12.6% despite a profit for the last quarter that was higher than that expected by analysts. The company gave profit and revenue forecasts for its next fiscal year that fell a bit short of analysts’ estimates.
Warner Bros. Discovery soared 14.6% after unveiling a new corporate structure that separates its streaming businesses and movie studios from its traditional television operations. CEO David Zaslav said the move “enhances our flexibility with potential future strategic opportunities,” raising speculation about a split or sale.
Kroger rose 3.3% after saying it would start buying back its own shares now that its Albertsons merger attempt canceled. Kroger’s board approved a stock repurchase program of up to $7.5 billion, replacing an existing $1 billion authorization.
In foreign stock markets, European indices remained relatively stable after the European Central Bank cut interest rates.
Asian markets were stronger. Indexes rose 1.2% in Hong Kong and 0.8% in Shanghai leaders met in Beijing to set economic plans and targets for the coming year.
South Korea’s Kospi rose 1.6% for its third consecutive gain of at least 1%, as it retreats after last week’s political unrest where its president briefly declared martial law.
On the bond market, the yield on the 10-year US Treasury rose from 4.27% to 4.31% on Wednesday evening. The two-year Treasury yield, which more closely tracks Fed expectations, rose to 4.17% from 4.16%.
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AP Business writers Matt Ott and Elaine Kurtenbach contributed.
