Wednesday, May 22, 2024

Indexes open lower on Wall Street following 4 days of gains

by Associated Press

NEW YORK (AP) — Stocks are off to a sluggish start on Wall Street as a four-day rally in the S&P 500 cools off. The benchmark index was down 0.2% in the early going on Thursday, a day after it came within 2% of the record high it reached in February. The latest report on jobs was grim but did offer a few glimmers of hope. Nearly 1.2 million laid-off Americans applied for unemployment benefits last week, but the number wasn’t quite as bad as economists were expecting and was the lowest level since mid-March. Treasury yields fell and gold prices continued to rise.

Stock markets turned lower on Thursday ahead of weekly U.S. data on jobless claims and as investors watched to see if U.S. lawmakers will come ahead with fresh stimulus for the world’s largest economy.

The U.S. government data is expected to show that layoffs remained elevated at a weekly pace above 1 million since the pandemic erupted in March. The rate of applications for unemployment benefits has stalled at roughly twice the record high that had existed before the virus sent the economy spiraling into a recession.

The latest string of layoffs follows the expiration of a $600 weekly federal jobless payment that provided critical support for many of the unemployed. Members of Congress are locked in prolonged negotiations over a new rescue aid package that might extend that unemployment benefit, though likely at a lower level of payment.

On Wall Street, Dow futures were down 0.2% while those for the S&P 500 were 0.3% lower.

Germany’s DAX shed 0.7% to 12,575 while the CAC 40 in Paris dropped 1.1% to 4,881. Britain’s FTSE 100 fell 1.8% to 5,997 after the Bank of England warned that the economy will take time to heal from the ongoing recession.

In Asian trading, Tokyo’s Nikkei 225 index shed 0.4% to 22,418.15 while the Shanghai Composite index gained 0.3%, clawing back losses in last minute buying to close at 3,386.46. Hong Kong lost 0.7% to 24,930.58.

South Korea’s Kospi added 1.3%, closing at 2,342.61 after Samsung Electronics, the country’s biggest company, unveiled three new models of smartphones it hopes will revive its sinking sales. Samsung’s shares rose 1.9%.

Australia’s S&P/ASX 200 added 0.7% to 6,042.20, lifted by strong gains in commodity prices on expectations that China’s economy is on the mend after the country largely recovered from the pandemic.

Market sentiment is linked to economic data but also to negotiations in Washington on more support for the economy. Investors say such a package is crucial and needs to arrive quickly, with millions of Americans still out of work and $600 in weekly unemployment benefits from the U.S. government having recently expired.

“Democrats and the White House are inching closer to a deal,” Stephen Innes of AxiCorp said in a commentary.

A report released Wednesday suggested that U.S. hiring was far weaker last month than economists expected. Private employers added just 167,000 jobs, according to a survey by payroll processor ADP, well below the 1.2 million that economists had forecast. A more comprehensive jobs report from the Labor Department is due Friday.

Rising caseloads of the coronavirus remain a concern, however, with officials in Spain warning of a relapse while numbers continue to mount in the U.S.

In Japan, the governor of Aichi prefecture, where Toyota Motor Corp. has its headquarters, declared a state of emergency through Aug. 24, saying newly confirmed cases have been rising by more than 100 daily. Before that, daily cases had been zero for extended periods.

Gov. Hideaki Ohmura told reporters businesses are being asked to close altogether or close early, and people are being asked to stay home at night, to prevent infections from spreading. Japan has largely sought to avoid major shutdowns, partly because of laws limiting the government’s powers.

Gold rose even further into record territory, continuing its strong climb since the spring amid nervousness about the economy and super-low interest rates. Gold for delivery in December, the most actively traded contract, rose $21.30 to $2,070.60 per ounce.

Benchmark U.S. crude fell back, giving up 42 cents to $42.77 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 17 cents to $45.00 a barrel.

In currency dealings, the dollar was down slightly at 105.44 yen, from 105.58 yen the da before. The euro fell to $1.1847 from $1.1868.

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