Asian stocks start the week down, following the pullback from Wall St
Stocks on Wall Street were mixed in afternoon trading on Monday, as investors braced for a two-day Federal Reserve meeting this week where the central bank is expected to raise interest rates sharply. interest in fighting inflation.
The S&P 500 index was up 0.2% at 1:18 p.m. EST after fluctuating between gains and losses. The Dow Jones Industrial Average rose 99 points, or 0.3%, to 31,998. The tech-heavy Nasdaq Composite fell 0.2%.
Major indexes posted strong gains last week after a mix of mostly better than expected corporate earnings reports. Falling yields in the bond market also helped, easing pressure on equities after expectations of Fed rate hikes pushed yields higher for much of this year.
On Wednesday, most economists expect the Fed to announce a three-quarters of a percentage point hike in its short-term rate, a second sharp hike in a row that it hasn’t otherwise implemented since 1994. That would put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest since 2018.
The U.S. economy is slowing, but healthy hiring shows it’s not yet in a recession, Treasury Secretary Janet Yellen said on NBC’s “Meet the Press” program on Sunday. She spoke ahead of release this week on a series of economic reports that will shed light on an economy currently beleaguered by runaway inflation as interest rates rise.
Some early signs suggest inflation may be cooling from searing levels. The AAA Auto Club said on its website Monday that the average price for a gallon of regular gasoline is $4.36 a gallon. That’s 16 cents lower than a week ago and 55 cents lower than at the end of June, when the average price was $4.91 a gallon. Crude oil prices have fallen almost 10% this month alone.
Outside of the Fed meeting, the most high-profile report is likely to be Thursday, when the Commerce Department releases its first estimate of economic output in the April-June quarter. Some economists forecast that it could post a contraction for the second consecutive quarter. The economy shrank 1.6% in the January-March quarter. Two consecutive negative readings are unofficially considered a recession.
Earnings will be quiet on Monday, but pick up later this week when tech heavyweights like Apple, Meta, Microsoft and Amazon all release their results. Other big companies reporting this week include Coca-Cola and McDonald’s, where investors could look to see the impact of inflation on these inflation-conscious, consumer-focused companies.
Energy companies, banks and health care stocks helped lift the market on Monday. Exxon Mobil rose 3.2% and Bank of America added 1.3%. UnitedHealth Group gained 1.4%.
Technology stocks contained the index gains. Chipmaker Nvidia fell 2.2%.
Restaurant chains, retailers and other businesses that rely on direct consumer spending also fell. Olive Garden owner Darden Restaurants was down 2.36%, while Dollar Tree fell 2.1%.
World Wrestling Entertainment jumped 8% after CEO Vince McMahon retired on Friday amid an investigation into alleged misconduct.
Weber fell 13.4% after the Illinois-based grill maker announced the departure of CEO Chris Scherzinger. It also withdrew its forecast for 2022 and suspended its dividend.
Newmont slid 12.2% after the gold miner’s second-quarter profits fell sharply from a year earlier amid higher costs and weaker gold prices.
Bond yields rose. The two-year Treasury yield, which tends to move with Fed expectations, rose to 3.02% from 2.97% Friday night. The 10-year yield, which influences mortgage rates, rose from 2.78% to 2.81%.
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