Thursday, June 13, 2024

Stocks open tentatively higher as earnings news pours in

by Associated Press

NEW YORK (AP) — Stocks are opening tentatively higher on Wall Street ahead of a busy day of potentially market-moving news. The S&P 500 was up 0.4%. Technology stocks were among the biggest winners in the early going on Wednesday, and chip maker AMD jumped 12% after reporting results that easily bested analysts’ forecasts. Starbucks also rose sharply after the company said it’s recovering faster than expected as its stores reopen. Later in the day the CEOs of Apple, Amazon, Facebook and Google’s parent company face questions from Congress in virtual testimony, and the Federal Reserve releases its latest update on interest rate policy and the economy.

World markets traded in narrow ranges on Wednesday as investors looked to the U.S. Federal Reserve for clues about the economic outlook at a time of pessimism over the fallout from the coronavirus pandemic.

The Fed is largely expected to keep short-term rates at their record, near-zero low, but they’re also looking to hear what it says about how long they may stay there. The central bank helped launch the stock market’s recovery in late March by slashing interest rates and promising to buy Treasurys, corporate bonds and other debt, pumping cash into the economy.

On Tuesday, the Fed said it will extend the lives of seven of the lending programs by three months through the end of the year in an acknowledgment of the severity of the recession.

Dow futures were up 0.1% and those for the S&P 500 gained 0.2% soon before the start of trading on Wall Street.

In Europe, Germany’s DAX was flat at 12,835 while in France, the CAC 40 rose 0.9% to 4,971. Britain’s FTSE 100 added 0.2% to 6,143.

Overall, the pandemic is the primary concern for markets, as secondary outbreaks raise the likelihood of further lockdowns to curb a resurgence in countries that had thought to have the virus under control, said Jeffrey Halley of Oanda.

“An escalation followed by the renewal of severe movement restrictions could see the much-feared secondary wave double-dip recession occur. That has not been priced into markets remotely … But as yet, we are not at the double-dip stage,” Halley said in a commentary.

Tokyo’s Nikkei 225 index lost 1.2% to 22,397.11 after Fitch Ratings lowered its outlook for Japan to “negative” from “stable,” meaning it is at greater risk of seeing its rating downgraded.

“The coronavirus pandemic has caused a sharp economic contraction in Japan, despite the country’s early success in containing the virus,” Fitch said in announcing its decision.

Elsewhere in Asia, South Korea’s Kospi added 0.3% to 2,263.16. Australia’s S&P/ASX 200 slipped 0.2% to 6,006.40. Hong Kong’s Hang Seng climbed 0.5% to 24,883.14, while the Shanghai Composite index jumped 2.1% to 3,294.55 as buying kicked in after recent losses. India’s Sensex dropped 1.3% and also fell in Taiwan.

The price of gold rose $7.60 to $1,952.20 per ounce.

In corporate news, this week marks the heart of earnings reporting season for the S&P 500, and several big companies gave results that fell short of analysts’ already lowered expectations as the pandemic stole customers away and increased some costs.

Rising coronavirus counts in many U.S. states are bringing a new wave of shutdowns and investors are hopeful that Democrats and Republicans can reach a deal on more aid for the 16 million or so Americans who are getting unemployment benefits, even though the two sides still seem to be far apart.

Benchmark U.S. crude oil added 43 cents to $41.47 a barrel in electronic trading on the New York Mercantile Exchange. It lost 56 cents to $41.04 per barrel on Tuesday. Brent crude, the international standard, gained 51 cents to $44.12 per barrel.

The dollar slipped to 104.97 Japanese yen from 105.07 yen on Tuesday. The euro strengthened to $1.1736 from $1.1718.

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