Tuesday, May 28, 2024

Technology companies slump again, leading stock market lower

by Associated Press

Stocks of big technology companies are falling again in early trading on Wall Street, leading the overall market lower. The tech-heavy Nasdaq pulled back another 2.3% in the first few minutes of trading Tuesday, while the broader S&P 500 index of big U.S. companies lost 0.8%. Apple, PayPal and Twitter were all moving lower. Technology companies soared through the pandemic with so many people staying home, but with prospects for the economy improving those companies are giving back some of their gains. Meanwhile Treasury yields continued to climb, pushing the yield on the 10-year note up to 1.37%, its highest level in a year.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

TOKYO (AP) — Global markets were mixed Tuesday after a sell-off of shares in technology companies on Wall Street.

France’s CAC 40 edged 0.3% higher in early trading to 5,782.75, while Germany’s DAX was little changed, up less than 0.1% at 13,953.13. Britain’s FTSE 100 gained 0.5% to 6,646.83. U.S. shares were set for gains, with Dow futures up 0.3% at 31,548. S&P 500 futures rose 0.2% to 3,882.88.

Tokyo was closed for a national holiday. South Korea’s Kospi slipped 0.3% to 3,070.09. Australia’s S&P/ASX 200 gained 0.9% to 6,839.20. Hong Kong’s Hang Seng jumped 1.0% to 30,632.64, while the Shanghai Composite lost 0.2% to 3,636.36.

The technology sell-off spilled into Asia. Chinese cell phone maker Xiaomi fell 3.1%, e-commerce giant Alibaba lost 1.2% and Taiwan computer chip maker declined 1.4%.

Although the world’s economies have been battered by the coronavirus pandemic, the deployment of COVID-19 vaccines is raising hopes for a recovery.

“Thankfully, for society at large, there is more optimism than fear today, with vaccines showing scientific results on the ground that validate efficacy and effectiveness over transmission, leading the world back to normality starting soon,” said Stephen Innes, chief global markets strategist at Axi.

Stocks began shedding some of their gains last week after a strong start to February as rising interest rates and the potential for inflation down the road dampened some of Wall Street’s enthusiasm, though the major stock indexes remain near their all-time highs.

Investors remain focused on the future of global economies badly hit by COVID-19 and the potential for more stimulus to fix them. The U.S. House of Representatives is likely to vote on President Joe Biden’s proposed stimulus package by the end of the week. It would include $1,400 checks to most Americans, additional payments for children, and billions of dollars in aid to state and local governments as well as additional aid to businesses impacted by the pandemic.

But the large amount of stimulus being pumped into the economy has given some investors pause, reviving worries about inflation that have been nearly nonexistent for more than a decade. Yields on U.S. Treasury bonds and notes have risen in the last several weeks as investors bet the recovery will bring more inflation.

Tech stocks have thrived throughout the pandemic, as investors bet that consumers spending more time at home would increasingly rely on mobile devices, PCs, video streaming and other technology products and services.

In energy trading, U.S. benchmark crude rose $1 to $62.70 a barrel in electronic trading on the New York Mercantile Exchange. It gained $2.44 to $61.70 per barrel on Monday. Brent crude, the international standard, rose $1.08 to $65.44.

In currency trading, the U.S. dollar climbed to 105.21 Japanese yen from 105.08 yen. The euro cost $1.2158, up from $1.2157.

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