Monday, July 22, 2024

Stocks open higher on Wall Street as Big Tech regains ground

by Associated Press

Stocks are opening higher on Wall Street following three days of losses and the biggest one-day drop in the S&P 500 since February. Big Tech companies like Apple and Microsoft, which had posted some of the bigger losses this week, were rising in the early going Thursday. the S&P 500 added 0.8% in the first few minutes of trading while the tech-heavy Nasdaq rose 1.3%. Investors got some mixed news on the economy, a larger-than-expected climb in producer prices last month but also a drop in weekly unemployment claims to the lowest level since the pandemic began. Treasury yields fell.

Stock markets in London and Tokyo tumbled 2.5% on Thursday and U.S. futures were lower after a jump in American consumer prices fueled worries inflation might drag on an economic recovery.

Shanghai, Frankfurt and Hong Kong also declined for a second day, following Wall Street lower.

Overnight, Wall Street’s benchmark S&P 500 index recorded its biggest one-day drop in three months after U.S. prices, exceeding forecasts, rose in April at their fastest year-on-year pace in 13 years.

Rising prices reflect growing economic activity after last year’s global shutdown to fight the coronavirus pandemic. But investors worry inflation might disrupt the recovery or prompt central banks to withdraw stimulus and near-zero interest rates.

The Federal Reserve says this surge should be temporary, but “if inflation does not calm,” the challenge to the U.S. central bank’s credibility “could be disruptive,” Tai Hui of JP Morgan Asset Management said in a report.

The FTSE in London fell by an unusually wide margin of 2.5% at the opening bell to 6,829.76. Frankfurt’s DAX fell 2% to 14,839.30 while CAC 40 in France lost 1.9% to 6,158.33.

On Wall Street, the S&P 500 future was down 0.4% and that for the Dow Jones Industrial Average was off 0.6%.

On Wednesday, the S&P 500 lost 2.1% while the Dow shed 2% in its biggest decline since January. The Nasdaq gave up 2.7% in its largest pullback since March.

The Nikkei 225 in Tokyo fell 2.5% to 27,448.01 while the Shanghai Composite Index lost 1% to 3,429.54. The Hang Seng in Hong Kong retreated 1.8% to 27,718.67.

The Kospi in Seoul sank 1.2% to 3,122.11 and Sydney’s S&P-ASX 200 was 0.9% lower at 6,982.70.

Thailand’s benchmark fell more than 2% as the country reported a record 4,887 new COVID-19 cases in its worst outbreak since the pandemic started. More than half were in just two prisons in Bangkok.

New Zealand also retreated. Markets in India, Indonesia and Singapore were closed for holidays.

On Wednesday, Apple, Microsoft and Amazon all fell more than 2%. Tesla fell 4.4%, bringing its pullback this month to nearly 17%.

Bond yields, or the difference between market price and the payout at maturity, snapped higher as prices fell. Bond prices fall if investors worry the value of that payout will be eroded by higher inflation.

The yield on the 10-year Treasury note rose to 1.69% from Tuesday’s 1.62%, a big move.

In energy markets, benchmark U.S. crude fell $1.39 to $64.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 80 cents on Wednesday to $66.08. Brent crude, used to price international oils, sank $1.37 to $67.95 per barrel in London. It rose 77 cents the previous session to $69.32 a barrel.

The dollar gained to 109.63 yen from Wednesday’s 109.60 yen. The euro declined to $1.2056 from $1.2080.

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