Wall Street lets off the accelerator after setting records
Business
Wall Street lets off the accelerator after setting records FILE - An entrance to the New York Stock
NEW YORK (AP) — U.S. stocks are drifting Thursday as momentum cools following their jumps to records the day before.
The S&P 500 was 0.1% higher in early trading. The Dow Jones Industrial Average was up 36 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was virtually flat. All three set all-time highs on Wednesday.
Walmart climbed 6.4% after reporting stronger profit for the latest quarter than analysts expected. It also said its revenue for the year could top the forecasted range it had earlier given. That could be an encouraging signal for the broader economy, as worries have risen about whether U.S. households can keep up with still-high inflation and more expensive credit-card payments.
Target, which reports its quarterly results next week, was also rising, along with other retailers like Dollar General.
Chubb rose 5.5% after Warren Buffett’s Berkshire Hathaway disclosed it had built an ownership stake in the insurer.
Stronger-than-expected profit reports have been one of the main reasons U.S. stock indexes jumped through May to records following their tough April. Another has been revived hopes that the Federal Reserve will be able to cut its main interest rate at least once or twice this year.
A string of worse-than-expected reports on inflation at the start of the year had put the potential for such cuts in jeopardy, but some more encouraging data has since arrived.
Treasury yields have eased in May as hopes rose that the economy could hit the hoped-for sweet spot, where it cools enough to stifle high inflation but not so much that it causes a bad recession. Yields were holding relatively steady Thursday following some mixed data on the economy.
One report showed slightly more workers applied for unemployment benefits last week than economists expected, though the number remains low compared with history. Others said homebuilders broke ground on fewer projects last month than expected, manufacturing growth in the mid-Atlantic region was weaker than hoped and import prices rose more than forecast.
“Today’s numbers were in line with the overall theme of the week—nothing dramatic, but showing signs of a steady-to-cooling economy,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
The yield on the 10-year Treasury was holding steady at 4.35%. The two-year yield, which moves more closely with expectations for action by the Fed, rose to 4.77% from 4.72% late Wednesday.
On the losing end of Wall Street, Deere fell 2.2% despite reporting stronger profit for its latest quarter than expected. It cut its forecast for profit over the full fiscal year below analysts’ estimates, as farmers buy fewer tractors and other equipment.
GameStop and AMC Entertainment were also sliding for a second straight day, pulling back further from their jaw-dropping starts to the week. They’ve been moving more on excitement drummed up by investors than any changes to their financial prospects.
GameStop fell 18%, though it’s still up 85% for the week so far. AMC Entertainment lost 9.8%.
In stock markets abroad, indexes were modestly lower in much of Europe after mostly rising in Asia. Hong Kong’s Hang Seng jumped 1.6% after reopening following a holiday, while Japan’s Nikkei 225 rose 1.4%.
