Friday, May 24, 2024

Stocks open higher on Wall Street, S&P 500 nears record high

by Associated Press

NEW YORK (AP) — Stocks are nudging higher in the early going on Wall Street Tuesday, pushing the S&P 500 index slightly over the record high close it reached in February. Technology companies again led the way higher. Business software maker Oracle climbed following a report that it was interested in making its own bid to acquire the U.S. operations of TikTok, a Chinese video app. Homebuilders rose after the government reported that construction of new homes soared 22.6% last month. It was the third straight month of gains after construction plunged in March and April as the coronavirus outbreak paralyzed the economy.

Global stock markets rose on Tuesday and Wall Street looked set to edge up on the open, with the S&P 500 not far from a record closing high it set in February before the pandemic crunched the global economy.

Britain’s FTSE 100 rose 0.3% to 6,145, while the DAX in Frankfurt rose 0.9% to 13,039. In Paris, the CAC 40 gained 0.5% to 4,995. The futures for the S&P 500 and the Dow industrials both gained 0.2%.

Markets were buoyed by developments in Washington, after Speaker Nancy Pelosi called the House back into session, cutting short the lawmakers’ summer recess for a vote expected Saturday on legislation to prohibit changes in the U.S. Postal Service amid growing concerns that the Trump administration is trying to undermine the agency ahead of the November election.

The proposed package will also include $25 billion to shore up the Postal Service, which is suffering losses. But prospects for additional economic aid for American workers and businesses remain uncertain after talks on a fresh stimulus package stalled.

Investors say it’s crucial that the support comes, particularly after $600 in weekly unemployment benefits and other stimulus from the U.S. government expired.

Without more help for the U.S. economy, analysts say the recovery that investors have been assuming is on the way won’t materialize. And that assumption is a huge reason the stock market is as high as it is.

Still, on Monday the S&P 500 picked up 0.3% to 3,381.99. Earlier in the day, it briefly crossed above its record closing level of 3,386.15, which was set on Feb. 19 before the pandemic shut down businesses worldwide and created the worst recession in decades.

Some analysts are skeptical about the rally’s premises.

“Markets may reboot quickly and return to growth. However, the economy is not doing so fast, and these macroeconomic factors promise to hurt markets in the coming months,” said Alex Kuptsikevich, senior market analyst at research firm and trading platform FxPro.

In Asia, South Korea’s Kospi led regional losses, slumping 2.5% to 2,348.24 amid worries over surging coronavirus cases. Hong Kong’s Hang Seng index lost 0.2% to 25,367.38. Japan’s Nikkei 225 slipped 0.2% to 23,051.08. Australia’s S&P/ASX 200 gained 0.8% to 6,123.40, while the Shanghai Composite index edged 0.4% higher, to 3,451.09.

Treasury yields moderated a bit, following a big rally for the 10-year yield last week. It dipped to 0.68% from 0.71% late Friday. It had zoomed upward from 0.56% through last week.

Higher yields suggest investors are upgrading their expectations for inflation and the economy. But they can also pull some buyers away from stocks into bonds, hurting stock prices.

Benchmark U.S. crude oil was down 30 cents at $42.39 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, dropped 20 cents to $45.17.

In currency markets, the dollar weakened to 105.52 Japanese yen from 105.98 yen. The euro rose to $1.1904 from $1.1873.

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