US stocks drift between gains and losses in early trading
NEW YORK — (AP) — Stocks are off to a weak start on Wall Street, drifting between small gains and losses in the first few minutes of trading Thursday. Several big technology companies were lower, with the notable exception of Cisco Systems, which turned in stronger-than-expected quarterly results. The S&P 500 was just barely in the red, while the Dow Jones Industrial Average and the Nasdaq fell a bit more. Energy companies were among the relatively few clear winners as the price of crude oil rose. European indexes were slightly higher and Asian markets closed lower overnight. The yield on the 10-year Treasury fell to 2.85%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Markets in the U.S. moved into positive territory before Thursday's opening bell ahead of more corporate earnings releases and weekly employment data.
Futures for the benchmark S&P 500 index and the Dow Jones Industrial Average rose 0.2% hours before the opening bell, bouncing back from overnight losses.
U.S. markets fell Wednesday on mixed earnings reports and the release of notes from the Federal Reserve's last meeting, where officials said inflation remains too hot despite aggressive rate hikes, suggesting support for more increases.
Even amid signs that U.S. economic growth is weakening, Fed board members during a two-day meeting late last month said inflation is “unacceptably high" and saw “little evidence” that those pressures are subsiding.
Investors worry aggressive rate hikes imposed by the Fed and central banks in Europe and Asia this year to tame inflation that is running at multi-decade highs might derail global economic growth.
The Fed notes raised “the prospects of further tightening," while some investors see possible “excessive tightening dragging growth,” Venkateswaran Lavanya of Mizuho Bank said in a report.
The Fed notes made clear the board plans to keep raising rates but gave no indication when or by how much.
The U.S. central bank has hiked its benchmark lending rate twice this year by 0.75 percentage points, triple its usual margin. Forecasters say a hike of the same size is possible at its September meeting, though the likelihood has declined as data show the economy weakening.
On Thursday, the government reports weekly unemployment claims, which serve as a proxy for layoffs. The U.S. job market has shown remarkable resiliency in the face of four-decade high inflation and two straight quarters of economic contraction.
In Asia, the Shanghai Composite Index lost 0.5% to 3,277.54 and the Nikkei 225 in Tokyo fell 1% to 28,942.14. The Hang Seng in Hong Kong sank 0.8% to 19,763.91.
Doubts are growing on Wall Street about growth in China, with analysts citing the global economy and falling demand, as well as the nation's ongoing struggle with COVID-19.
Goldman Sachs cut its growth expectations for the year from 3.3%, to 3%. Nomura, which had projected 3.3% growth, slashed its projection to 2.8%.
Beijing has a 5.5% growth target for 2022 but signaled this summer that it may fall short of that.
China's economy grew by just 2.5% in the first half of 2022, less than half what the nation’s central bank had projected.
Also Thursday, the U.S. government said it will hold trade talks with Taiwan in a sign of support for the island democracy that China claims as its own territory, prompting Beijing to warn that it will take action if necessary to "safeguard its sovereignty."
The U.S. Trade Representative’s announcement of the talks made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.
The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi this month became the highest-ranking American official to visit the island in 25 years.
Major retailers have posted a mixed bag of quarterly earnings results this week.
On Thursday, the department store Kohl’s and the high-end retailer Tapestry, the parent company of Coach and Kate Spade, issued outlooks for the year that fell short of projections from industry analysts. Kohl’s fell more than 8% and Tapestry slipped about 1% in premarket trading.
Target fell 2.7% Wednesday after reporting a nearly 90% plunge in second quarter profits. Walmart put up fairly strong earnings the previous day, but evidence of changing consumer behavior due to high inflation was clear.
The Commerce Department on Wednesday reported July retail sales were flat compared with the previous month, defying predictions of a slight increase. Retailers have warned high inflation will discourage consumers from spending on non-essentials.
Elsewhere, the Kospi in Seoul retreated 0.3% to 2,508.05 and Sydney's S&P-ASX 200 was down 0.2% at 7,112.80.
India's Sensex lost 0.3% to 60,064.94. New Zealand and Bangkok declined while Singapore and Jakarta advanced.
In Europe at midday, Frankfurt’s DAX added 0.7% and the CAC 40 in Paris gained 0.4%. The FTSE 100 in London was unchanged.
On Wall Street Wednesday, the S&P 500 tumbled 0.7%, wiping out the week’s gains. That left the index down 0.1% since Monday.
The Dow sank 0.5% and the Nasdaq slid 1.3%.
In energy markets, benchmark U.S. crude rose $1.06 to $89.17 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.58 to $88.11 on Wednesday. Brent crude, the price basis for international trading, gained $1.42 to $95.07 per barrel in London. It surged $1.31 the previous session to $93.65.
The dollar fell to 134.92 yen from Wednesday's 135.05 yen. The euro inched up to $1.0186 from $1.0169.
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