Stocks edge higher on Wall Street following 3 days of gains
Stocks turn mixed on Wall Street following 3 days of gains
(30 minutes later)
Stocks are slightly higher in early trading on Wall Street as a three-day rally loses momentum. The S&P 500 rose less than 0.1% in the first few minutes of trading Wednesday, led once again by technology companies. The recent strong streak for the market still hasn’t gotten the S&P 500 back to where it was before taking a 6% tumble last Thursday. Investors will be watching another day of Congressional testimony by Federal Reserve Chair Jerome Powell. A day earlier Powell warned that the U.S. economy faces a deep downturn with “significant uncertainty” about the timing and strength of a recovery.
NEW YORK — Stocks are turning mixed on Wall Street early Wednesday as markets around the world take a pause following their big rally a day before.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
The S&P 500 gave up an early gain and was little changed after the first half-hour of trading. Stocks elsewhere in the world made mostly modest gains, and Treasury yields were down slightly.
World markets followed Wall Street higher Wednesday on hopes for a global economic recovery.
The Dow Jones Industrial Average was little changed at 26,290 and the Nasdaq composite was up 0.4%.
London and Frankfurt opened higher. Benchmarks in Shanghai, Hong Kong and Seoul rose after early losses. Tokyo retreated after Japan reported its exports sank in May.
The S&P 500 has climbed back within 8% of its record set in February, after earlier being down nearly 34%, as reports give hope that the economy can pull out of its recession relatively quickly. With businesses reopening across the country, reports on retail sales Tuesday and on the job market earlier this month were much healthier than economists expected.
Global share prices have regained most of this year’s losses as investors count on a rebound from the coronavirus pandemic despite rising infections in the United States, Brazil and some other major countries.
Continuing, unprecedented amounts of aid from the Federal Reserve is also helping to support markets, and the central bank’s chair will offer a second day of testimony on Capitol Hill later in the day.
Analysts warn the gains are bigger and faster than justified by the uncertain economic outlook.
Still, many professional investors urge caution and say the market’s big rally may have been overdone. The road back to full recovery will be long and is full of potential setbacks, in sharp contrast to the quick surge of roughly 40% for the S&P 500 since late March.
Futures for the S&P 500 index and the Dow Jones Industrial Average were up 0.4% after the benchmark S&P 500 index added 1.9% on Tuesday for its third daily gain. That followed data showing U.S. retail spending was stronger than expected.
Consider Norwegian Cruise Line Holdings, whose stock has often led the market — both up and down — as expectations swing about the reopening economy. It had six straight days this month where it rose or fell more than 10%.
U.S. retail figures showing an 18% gain over the previous month are encouraging but still $50 billion below what might have been expected without the coronavirus, said Rob Carnell of ING in a report.
It said late Tuesday that it’s cancelling most of its voyages through September. Its shares fell 7.3%.
“We don’t imagine markets will share this nuanced view.” said Carnell. “They will likely make the most of any good news and continue to be dismissive of any bad news.”
The chief risk for the market lies in rising infection levels in several hotspots around the world, including Florida, Texas and China. Even if authorities don’t reinstate widespread lockdowns, the worry is that businesses and consumers could get frightened by new waves of infections and pull back on their spending.
On Wednesday in London, the FTSE 100 opened up 0.7% at 6,287.31 and Frankfurt’s DAX added 0.5% to 12,379.94. The CAC 40 in France advanced 0.5% to 4,979.13.
The yield on the 10-year Treasury slipped to 0.73% from 0.75% late Tuesday. It tends to move with investors’ expectations for the economy and inflation.
In Asia, the Shanghai Composite Index edged 0.1% higher to 2,935.87 while the Hang Seng in Hong Kong added 0.6% to 24,481.41.
In Europe, Germany’s DAX returned 0.6%, and France’s CAC 40 rose 1.1%. The FTSE 100 in London added 0.5%.
The Nikkei 225 in Tokyo shed 0.6% to 22,455.76 after the government reported May exports fell 28.3% from a year earlier in their biggest decline since the 2008 global crisis.
In Asia, South Korea’s Kospi ticked up 0.1%, and the Hang Seng in Hong Kong rose 0.6%. Japan’s Nikkei 225 fell 0.6% after the government reported the sharpest decline in exports since the 2008 global crisis.
In Seoul, the Kospi closed up 0.1% at 2,141.05. India’s Sensex lost 0.4% to 33,453.82.
A barrel of U.S. crude oil fell 1.5% to $37.79. Brent crude, the international standard, slipped 1.1% to $40.51 per barrel.
Sydney’s S&P-ASX 200 gained 0.8% to 5,991.80. New Zealand and Southeast Asia markets advanced.
Also Wednesday, Singapore reported May exports fell 25% from a year earlier.
Financial markets have been underpinned by promises from the Fed and other central banks to inject more money into economies through bond purchases and other steps.
However, analysts are skeptical about the U.S. stock market’s run since it began climbing after hitting a bottom in late March, down 34% from its record.
Investors have been pushing up shares of companies that would benefit from a reopening economy.
In energy markets, benchmark U.S. crude oil for July delivery lost 29 cents to $38.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.26 on Tuesday to settle at $38.38. Brent crude, the benchmark for international prices, shed 16 cents to $40,80 per barrel in London. It rose $1.24 the previous session to $40.96 a barrel.
The dollar gained to 107.39 yen from Tuesday’s 107.33 yen. The euro declined to $1.1230 from $1.1266.
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
