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Wall Street opens mixed on infection increase, economic data Wall Street drifts as week of erratic swings comes to close
(32 minutes later)
Wall Street is mixed at the open as investors weigh a rise in coronavirus cases in the United States against upbeat economic data in Europe. Labor Department data showed wholesale prices fell in June for the fourth time in five months, as the U.S.’s deep recession holds down prices. European shares edged up after manufacturing bounced back sharply in France and Italy in May. Investors worry that worsening infection levels in populous U.S. states could derail a recovery. Some states are rolling back their reopenings, while others are ordering people arriving from hotspots to quarantine. Asian markets closed lower. NEW YORK — Stocks are drifting in early trading on Wall Street Friday, the latest eddies in a week full of erratic swings driven by worries about rising coronavirus counts.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below. The S&P 500 was down 0.3%, as of 10:09 a.m. Eastern time, after flipping between small gains and losses in the first few minutes of trading. It followed up on a mixed performance for stocks in Europe and Asia.
World markets were mixed on Friday as investors weighed a rise in coronavirus cases in the United States against upbeat economic data in Europe. The Dow Jones Industrial Average was virtually flat at 25,706, while the Nasdaq composited fell 0.7% from its record. Most stocks in the market were up, though, and the Russell 2000 index of small-cap stocks was 0.2% higher.
Wall Street futures were down slightly and Asian markets closed lower. European shares, however, edged up after official figures showed industrial production bounced back sharply in some countries. Treasury yields were dipping a bit, while the price of gold peeked higher in another sign of caution continuing to hang over markets. Even Chinese stocks took a break from their torrid run. Stocks in Shanghai slumped nearly 2% for their first drop in nearly two weeks. They’re still up 14.3% over that span.
Markets have been swinging this week as worsening coronavirus infection counts across the U.S. Sun Belt and other global hotspots raise concerns that the economy’s recent budding improvements may be set to stall. The S&P 500 has flip-flopped between gains and losses since Monday, and it’s on pace for a modest weekly gain of 0.6%. It’s a microcosm of the up-and-down churn stocks have been stuck in for a little more than a month.
After plummeting nearly 34% from its February record on recession worries, the S&P 500 quickly regained nearly all its losses by early June after central banks promised massive amounts of aid for the economy and hopes rose that a recovery was coming. Momentum has stalled since then, though, along with expectations for the economy by some economists.
A report on Friday showed that prices at the wholesale level fell last month from May, a weaker reading than the growth that economists were expecting. It’s a signal of how weakened activity throughout the economy is keeping a lid on inflation.
Stocks that would most benefit from a reopening and strengthening economy were taking the lead Friday morning, though.
Royal Caribbean Cruises gained 4.2%, and Southwest Airlines added 2.6%.
Banks were also strong, with financial stocks in the S&P 500 up 0.9%. A stronger economy would mean their borrowers are better able to repay their loans.
Energy stocks climbed with the price of oil, which has swung sharply with hopes for the economy. Benchmark U.S. crude oil rose 0.8% to $39.91 per barrel. Brent crude, the international standard, add 0.6% to $42.62.
On the losing end were some of the stocks that have been holding up best this year: big tech-oriented giants. Apple slipped 0.9%, and Microsoft dropped 1.3%. It’s at least a temporary turnaround for such stocks, which have continued to climb as investors bet they’ll be able to keep growing almost regardless of the economy’s strength.
Because these tech giants are so big — just five of them make up 23% of the S&P 500’s market value — their movements have outsized sway on market indexes. That helped weigh on the S&P 500, even though most stocks in the index rose.
The yield on the 10-year Treasury, which tends to move with investors’ expectations for the economy and inflation, dipped to 0.59% from 0.60% late Thursday. The 30-year yield fell to 1.28% from 1.31%.
Gold rose 0.3% to $1,809.40 per ounce.
In overseas stock markets, European markets edged up after official figures showed industrial production bounced back sharply in some countries.
Manufacturing jumped 22% month-on-month in France in May, making up for the previous month’s fall. In Italy industrial production spiked 42% during the same month.Manufacturing jumped 22% month-on-month in France in May, making up for the previous month’s fall. In Italy industrial production spiked 42% during the same month.
The CAC 40 in France added 0.4% to 4,938, while Frankfurt’s DAX gained 0.5% to 12,548. The FTSE 100 in London gained 0.5% to 6,079. The CAC 40 in France added 0.8%, while Germany’s DAX returned 0.9%. The FTSE 100 in London gained 0.7%.
Beyond Europe, investors appeared more cautious, with futures for the benchmark S&P 500 and for the Dow Jones Industrial Average were both down 0.5%. In Asia, the Nikkei 225 in Tokyo shed 1.1%, the Hang Seng in Hong Kong retreated 1.8% to 25,727.41 and the Kospi in Seoul lost 0.8%.
In Asia, the Shanghai Composite Index lost 1.9% to 3,383.32 and the Nikkei 225 in Tokyo shed 1.1% to 22,290.81. The Hang Seng in Hong Kong retreated 1.8% to 25,727.41.
The Kospi in Seoul lost 0.8% to 2,140.25 and Sydney’s S&P-ASX 200 declined 0.6% at 5,919.20. India’s Sensex lost 0.3% to 36,625.60. New Zealand, Jakarta and Bangkok retreated, while Singapore markets were closed.
“The market is concerned about the uptick in cases globally,” said Stephen Innes of AxiCorp. in a report. “Money is funneling into perceived safe areas of the market like tech, which should hold up broader indexes to a degree.”
U.S. government data showed 1.3 million workers filed for unemployment claims last week. That is down from 1.4 million the prior week and a peak of nearly 6.9 million in late March.
The improvements have helped validate investors’ optimism that the economy can recover as anti-virus controls are relaxed. That helped the S&P 500 rebound to within 7% of its record, after being down nearly 34%.
But economists point to a troubling slowdown in the pace of such changes, including moderating declines in the four-week average of jobless claims.
Investors are worried that worsening infection levels in the populous U.S. states of Florida, Texas and California could derail a recovery. Some states are rolling back their reopenings, while others are ordering people arriving from hotspots to quarantine.
Other countries including Brazil and South Africa also report rising case totals. Australia’s populous state of Victoria closed its border with neighboring New South Wales this week to contain an outbreak.
In energy markets, benchmark U.S. crude lost 58 cents to $39.04 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, declined 51 cents to $41.84 per barrel in London.
The dollar declined to 106.88 yen from Thursday’s 107.95. The euro was down slightly at $1.1280 from $1.1287.
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.