Wednesday, June 12, 2024

Stocks open higher on Wall Street a day after broad decline

by Associated Press

Stocks are opening higher on Wall Street Tuesday as investors shake off a rout a day earlier brought on by concerns about the spread of a more contagious variant of COVID-19. The S&P 500 was up 0.4% in the early going, a day after its biggest drop since May. The bond market was continuing to flash cautious signals, however. The yield on the 10-year Treasury note fell again, to 1.14%, its lowest level since February. Hospital operator HCA Healthcare jumped after reporting a solid quarter and raising its forecasts, and IBM rose after reporting revenue that beat forecasts. Crude oil prices fell again.

European shares opened higher Tuesday after Asia tracked a retreat on Wall Street as investors grew jittery over the possibility that surging virus cases could stifle the global economic recovery.

Benchmarks rose in Paris and London but fell in Asia. U.S. futures were higher and the yield on the 10-year Treasury dropped to 1.18%.

Alarm has been mounting in Japan where, with just three days to go before the Tokyo Olympics open, new coronavirus cases are being found among athletes and non-athletes affiliated with the Games.

The Japanese government has repeatedly promised “a safe and secure” Games, but just about 22% of the Japanese population is fully vaccinated.

The World Health Organization says cases and deaths are climbing globally after a period of decline, spurred by the highly contagious delta variant.

France’s CAC 40 gained 0.4% to 6,322.92, while Germany’s DAX rose 0.1% to 15,150.96. Britain’s FTSE 100 added 0.3% to 6,861.42. The futures for the Dow industrials and the S&P 500 were up 0.3%.

In Asia, Tokyo’s Nikkei 225 slipped 1.0% to finish at 27,388.16. South Korea’s Kospi shed 0.4% to 3,232.70. Australia’s S&P/ASX 200 declined 0.5% to 7,252.20. Hong Kong’s Hang Seng lost 0.8% to 27,259.25, while the Shanghai Composite inched down nearly 0.1% to 3,536.79.

Given how tightly connected the global economy is, flare-ups in COVID anywhere can quickly affect the rest of the world.

Even in the U.S., where the vaccination rate is higher than in many other countries, people in Los Angeles County must once again wear masks indoors regardless of whether they’re vaccinated following spikes in cases, hospitalizations and deaths.

Any worsening of virus trends threatens the high prices that stocks have achieved on expectations the economy will fulfill those lofty forecasts.

Besides the new variants of the coronavirus, other risks include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

This week brings a slew of earnings reports. Across the S&P 500, analysts are forecasting profit growth of nearly 70% for the second quarter from a year earlier. That would be the strongest growth since 2009, when the economy was climbing out of the Great Recession.

In energy trading, benchmark U.S. crude rose 7 cents to $66.42 a barrel in electronic trading on the New York Mercantile Exchange. It sank $5.21 on Monday to $66.35.

Brent crude, the international standard, added 2 cents to $68.64 a barrel.

In currency trading, the U.S. dollar slipped to 109.41 Japanese yen from 109.46 yen. The euro fell to $1.1796 from $1.1802.

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